2016 Annual Report
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my health, my choice. myMCHCP
P Missouri Consolidated Health Care Plan
A Component Unit of the State of Missouri
2016 Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2016
Missouri Consolidated Health Care Plan
www.mchcp.org
800-701-8881
832 Weathered Rock Ct.
PO Box 104355
Jefferson City, MO 65110
2016 Annual Report
MCHCP
my health, my choice. myMCHCP
Missouri Consolidated Health Care Plan
A Component Unit of the State of Missouri
2016 Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2016
Table of Contents
Embark Introduction
Letter from the Executive Director 6-9
Certificate of Achievement 10
MCHCP Organization 11
Letter from the Chairperson 12-13
Professional Services 15
Board of Trustees -16-17
Summary of Plan Provisions 18-22
Guide Financial
Report of Independent Auditors 24-25
Management’s Discussion & Analysis 26-37
Internal Service Fund
Statement of Net Position 38
Statement of Revenues, Expenses & Change in Net Position 39
Statement of Cash Flows 40
State Retiree Benefit Trust
Statement of Fiduciary Net Position 42
Statement of Change in Fiduciary Net Position 43
Notes to Financial Statements 44-62
Direction
Required Supplementary Information
Schedule of Claims Development
Summary of Key Actuarial Methods & Assumptions
Schedule of Funding Progress
Schedule of Employer Contributions
Schedule of the Proportionate Share of the Net Pension Liability
Schedule of Contributions
Notes to Required Supplementary Information
66-67
68-69
70-71
70-71
70-71
— 72
— 72
Steadfast statistical
Historical Data: Revenues by Source, Expenses by Type 76
Distribution of Claim Payments 77
Healthcare Options by Year & Total Lives 78
Statement of Revenues, Expenses & Change in Net Position 80-81
Schedule of Net Position by Component, Full-Time Employees 82
Paid Claims Distribution by Individual 83
State Membership Enrolled in MCHCP 84
State Enrollment History, Enrollment Distribution 85
Public Entity Membership Enrolled in MCHCP 86
Public Entity Enrollment History, Enrollment Distribution 87
Plan Demographics, State & Public Entity 88-89
Letter from the Executive Director
It is with great pleasure that I submit the annual report of the Missouri
Consolidated Health Care Plan (MCHCP) for the period ended June 30, 2016.
MCHCP is a component unit of the state of Missouri for financial reporting
purposes and as such, the financial reports are also included in the state of
Missouri Comprehensive Annual Financial Report. The financial information
presented in this report is the responsibility of management of MCHCP and
sufficient internal accounting controls exist to provide a reasonable assurance
regarding safekeeping of assets and fair presentation of the financial statements,
supporting schedules and statistical tables. Systems and procedures are evaluated,
in conjunction with the Board of Trustees, MCHCP management and Internal
Audit to provide assurances that internal controls exist and are functioning to
promote objectives while minimizing risk. Reasonable assurance recognizes that
the cost of a control should not exceed the benefits to be derived; the objective
is to provide reasonable, rather than absolute assurance, that the financial
statements are free of material misstatements. The report is also designed to
comply with the provisions of section 103.025 of the Revised Statutes of Missouri
(RSMo) as amended.
Albert Einstein, often considered the most influential physicist of the 20th
century once said, “Look deep into nature, and then you will understand
everything better.” These thoughtful words embody the theme and imagery
of our fiscal year 2016 report, “Showing the Way. "Throughout the report, you
will see the beauty of our Missouri State Parks, with their trails and pathways
enhancing healthy opportunities to enjoy our state. We believe our efforts are
similar as we show and guide members with education, technology, wellness
incentives and a knowledgeable and experienced team in, “showing the way” in
understanding and utilizing health care benefits.
During the fiscal year ended June 30, 2016, the state of Missouri contributed
more than $391 million, or approximately 68 percent of revenues, to the Plan
in the form of employer sponsored contributions. Member contributions
for our state members exceeded $13 5 million, while revenues for public
enrollment approached $8 million. Medical and pharmacy claims and operations
expenditures for our state and public employees exceeded $597 million for the
period. With increasing trends in medical costs and utilization and new and
advancing pharmaceutical drugs available; the financial support of the state,
the MCHCP trust fund and, our members, is crucial to the financial strength of
the Plan. Additional financial information can be found in the management
discussion and analysis beginning on page 26, financial statements, and notes to
the financial statements included in this report.
6 EMBARK | Introduction
Improving technology and outreach remains vital as we communicate with the
more than 96,000 lives we serve. During fiscal year 2016, MCHCP implemented
a responsive website design to accommodate members who access their
information through mobile devices. Business processes were leveraged through
an improved document imaging system allowing for better access to member
records. Infrastructure improvements related to business continuity were also a
focus during the year.
The Strive for Wellness’ Health Center, located in the Harry S Truman Building
workplace, continues to serve and offer our active membership an alternative
option to traditional offerings. During fiscal year 2016, the Center was visited by
2,780 plan members and reported overall satisfaction in excess of 97 percent. We
continue to explore additional offerings and opportunities to serve our members
to facilitate the appropriate utilization of health care. In addition, our Strive for
Wellness’ team of expert clinicians and health educators have led on-site weight
management courses and quit tobacco courses experiencing an average quit rate
of 31 percent for the courses offered. As the renowned poet and author, Maya
Angelou, once said, “All great achievements require time.” We understand change
doesn’t happen overnight, but we applaud our members’ efforts and continue to
pursue additional ways to encourage their healthy endeavors.
Participation and engagement of our population in their health remains vitally
important as we look for methodologies in the trends influencing health and
health care costs. During the open enrollment period encompassing fiscal year
2016, more than 17,000 members utilized our online myPlan Advisor, managed
through our health partner Truven Health Analytics, in selecting their health
plan for 2016. The online application utilizes the members’ recent and historical
medical outlay coupled with the ability to anticipate individual and family
utilization to arrive at their recommended plan selection. We are encouraged by
members’ interest in advancing technology that increase their health literacy and
facilitate informed MCHCP health consumers.
For the 21st year in a row, MCHCP was pleased to receive the Government
Finance Officers Association of the United States and Canada (GFOA) Certificate
of Achievement for Excellence in Financial Reporting for its Comprehensive
Annual Financial Report for the fiscal year ended June 30, 201 5. The Certificate
of Achievement is a prestigious national award recognizing conformance with
the highest standards for preparation of state and local government financial
reports. In order to qualify, a government unit must publish a report conforming
2016 Annual Report 7
to all GFOA standards. The Certificate of Achievement is valid for a period
of one year only. MCHCP will continue to strive for such recognition with its
submission of our current report for consideration to GFOA. Additionally,
MCHCP received three 2016 American InHouse Design Awards for “Best
Corporate ID” for the Strive for Wellness’ Weight Management Course materials,
“Best Poster” for our 2015 Missouri State Employee 5K poster, and “Best Direct
Mail,” for the myVoice Panel postcard.
This report is a product of the combined efforts of the MCHCP staff and the
Board of Trustees. It is intended to provide complete and reliable information as
a basis for making management decisions, for determining compliance with legal
provisions and for evaluating the condition of the fund. MCHCP has received an
unqualified opinion from our independent auditors whose report can be found
on pages 24 and 25.
This report is provided to the Governor, the State Auditor, members of the
General Assembly, all state agencies, and all participating public entities and is
viewable at www.mchcp.org. The cooperation and support of these individuals and
agencies help contribute to our success. Also, for the Board of Trustees, I extend
my gratitude to the staff who are passionately “showing the way" every day to
provide the quality service you have come to expect from MCHCP.
I welcome your suggestions for the continued success and improvements of your
health plan, MCHCP.
Yours in health.
Judith Muck
Executive Director
December 2, 2016
8 EMBARK | Introduction
Van Meter State Park
Miami, MO
Certificate of Achievement
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Missouri Conso[]dat«d
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10 EMBARK I Introduction
MCHCP Organization
Benefit
Administration
Vendor
Relations
Judith Muck
Executive Director
Stacia G. Fischer
Chief Financial Officer
Population
Health
Clinical
Services
Julie K. Watson
Chief Population Health Officer
Information
Technology
Receiving
Services
Bruce R. Lowe
Chief Information Officer
Plan
Integrity
Human
Resources
Jennifer Stilabower
General Counsel
2016 Annual Report 11
Letter from the Chairperson
It is my distinct pleasure to present to you, on behalf of the Board of Trustees, the
Comprehensive Annual Financial Report for the Missouri Consolidated Health
Care Plan (MCHCP) for the period ended June 30, 2016.
Answering the call for leadership amongst the ever-changing landscape of health
care is the staple of our fiscal year 2016 report theme, “Showing the Way.”Similar
to the trails and pathways throughout our Missouri State Parks that guide and
lead many of our members on their healthy adventures, MCHCP’s support,
through dedicated customer service and education to enhance our members’
experience while showing our customer base the comprehensive benefits
available to our membership, reflects our strong commitment to charting the
path for you, our members. Operationally, MCHCP technologies focusing on
administrative and financial efficiencies have allowed us to reach you in just the
path that best suits you whether it be through the website at www.mchcp.oig that
experienced more than 28 5,000 visits during the year or contacting the dedicated
service specialists who answered more than 2 5,000 of your calls and inquiries.
We understand that a membership can be best served when knowledgeable
regarding benefits and outfitted with the necessary tools to promote and effect
healthy behaviors.
Missouri, as many states throughout the nation, faces many economic
opportunities and challenges. For the fiscal year ended, June 30, 2016, the state’s
net general revenue collections increased 0.9 percent compared to 201 5, from
$8.71 billion last year to $8.79 billion this year. As the state and the assets of the
Plan remains the largest single source of contributions to the Plan as witnessed
in the chart on the following page, we remain steadfast in our commitment
as stewards of taxpayer dollars and Plan assets to offer comprehensive and
affordable coverage that leverages our economies and engages our population in
healthy outcomes.
Partnering with our membership through cooperative engagement remains
essential to the overall financial health of the Plan and the well-being of those
we serve. During fiscal year 2016, on average, more than 57 percent of eligible
members participated in the Partnership Incentive, while more than 7 5 percent
of those eligible for Tobacco-Free Incentives attested. Statistically, MCHCP’s
healthiest 23.3 percent of members account for 0.8 percent of the cost, while the
least healthy 6.8 percent of our members account for a staggering 40 percent of
the cost. As lifestyle-related conditions account for nearly 20 percent of total paid
claims, wellness initiatives remain influential in establishing and modeling for a
healthier MCHCP population.
12 EMBARK | Introduction
Share of Premium
1 00%
40%
60%
20%
80%
0%
89%
83%
Employee Only
Family
State and Local
Governments peer group
MCHCP*
^Contributions from the state and MCHCP trust fund.
Reference: Bureau of Labor Statistics news release, July 22,2016.
Expenditures for our self-funded medical and pharmacy, and fully-insured dental
and vision benefits during fiscal year 2016 for state employees were approximately
$562 million; an increase of approximately 10 percent over fiscal year 201 5 totals.
The Plan is experiencing overall increases in utilization and medical unit costs and
in pharmacy expenditures.
Plan resources at fiscal year end June 30, 2016, of more than $391 million were
contributed by the state, while members’ contributed more than $13 5 million
in state employee premiums, and non-operating revenue, primarily return on
investment, totaled more than $3.4 million.
We are appreciative of the more than 96,000 state and public members we serve.
We look forward to continually, “Showing the Way,” through the opportunities and
challenges ahead as we remain focused on our mission of delivering comprehensive
and affordable health coverage to our members. We are deeply thankful for the
dedicated MCHCP staff, vendors and advisors who have contributed and worked
tirelessly with us throughout the year.
Sincerely,
Doug Nelson
Chairperson
Board of Trustees
December 2, 2016
2016 Annual Report 13
Katy Trail
Rhineland, MO
Professional Services
AUDIT SERVICES
Brown Smith Wallace, LLP
Willis Towers Watson
Truven Health Analytics
BANKING
Central Bank
CONSULTING
Willis Towers Watson
DECISION SUPPORT SYSTEM
Truven Health Analytics
EMPLOYEE ASSISTANCE
PROGRAM
ComPsych
HEALTH SAVINGS ACCOUNT
(HSA)
Central Bank
MEDICAL THIRD PARTY
ADMINISTRATOR
UMR
Aetna
PHARMACY BENEFIT
MANAGER
Express Scripts, Inc.
VISION PROGRAM
National Vision Administrators
WELLNESS PROGRAM
Optum, Inc.
DENTAL PROGRAM
Delta Dental of Missouri
DISEASE MANAGEMENT
PROGRAM
Optum, Inc.
2016 Annual Report 15
Board of Trustees
Chairperson
Doug Nelson
Commissioner
Office of Administration
Jefferson City
Ex Officio Member
Honorable Caleb Rowden
Missouri House of
Representatives
District 044
Appointed by the
Speaker of the House
of Representatives
Vice Chairperson
Mark A. Langworthy
Columbia
Governor- Appointed
Member
Honorable David Sater
Missouri Senate
District 029
Appointed by the
President Pro Tern of
the Senate
John M. Huff
Director
Department of Insurance,
Financial Institutions &
Professional Registration
Jefferson City
Ex Officio Member
Viola Schaefer
Jefferson City
Governor- Appointed
Member
16 EMBARK | Introduction
Honorable Kip Kendrick
Missouri House of
Representatives
District 045
Appointed by the
Speaker of the House
of Representatives
Honorable Scott Sifton
Missouri Senate
District 001
Appointed by the President
Pro Tern of the Senate
Linda Luebbering
Jeffersan City
Governor- Appointed
Member
Michael Warrick
Jefferson City
Governor- Appointed
Member
Peter Lyskowski
Director
Department of Health and
Senior Services
Jefferson City
Ex Officio Member
Two Governor-Appointed
Members were open as of
June 30, 2016.
2016 Annual Report 17
Summary of Plan Provisions
VISION
To be recognized and valued by our members as their
advocate in providing affordable, accessible, quality
health care options.
PURPOSE
Established Jan. 1, 1994, the Missouri Consolidated
Health Care Plan (MCHCP) or the Plan was created to
provide health care benefits to most state employees,
retirees and their dependents, and public entities within
the state that join the Plan.
MISSION
To provide access to quality and affordable health
insurance to state and local government employees. We
will accomplish this by:
• Consolidating purchasing power and
administration to achieve benefits not available to
individual employer members
• Creating collaborations to ensure the needs of
individual members are understood and met
• Ensuring fiscal responsibility
• Developing innovative delivery options and
incentives
• Identifying and contracting with high-value plans
• Maintaining a high-quality and knowledgeable
work force
ADMINISTRATION
MCHCP administers medical, dental and vision benefits
and an employee assistance program (EAP) for most
members of the Missouri State Employees’ Retirement
System, Judicial Retirement Plan, some members
of the Public School Retirement System, legislators.
statewide elected officials and eligible public entity
members. In addition, dental and vision benefits are
available to employees and retirees of the Departments
of Conservation and Transportation, and the Missouri
State Highway Patrol. EAP benefits are available to
active employees eligible for MCHCP medical coverage
and members of their household.
Missouri statutes provide that the administration of
MCHCP be vested in a 13-member Board of Trustees.
The Board is composed of:
• The Director of the Department of Health and
Senior Services, serving ex officio
• The Director of the Department of Insurance,
Financial Institutions and Professional
Registration, serving ex officio
• The Commissioner of the state Office of
Administration, serving ex officio
• Two members of the Senate, appointed by the
President Pro Tern of the Senate
• Two members of the House of Representatives,
appointed by the Speaker of the House of
Representatives
• Six members appointed by the Governor with
the advice and consent of the Senate. Of the six
members appointed by the Governor, three shall
be citizens of the state of Missouri who are not
members of the Plan but who are familiar with
medical issues. The remaining three members of
the Board shall be members of the Plan.
The management of MCHCP is the responsibility of the
Executive Director, who is appointed by the Board of
Trustees and serves at its pleasure.
The Executive Director acts as advisor to the Board on
all matters pertaining to MCHCP and, with the approval
of the Board, contracts for professional services and
employs the staff needed to operate the organization.
18 EMBARK | Introduction
MEDICAL PLANS
Preferred Provider Organization (PPO) plans are available to all members and a Health Savings Account
Plan (HSA Plan) is available to most members. All plans offer the same basic coverage for medical and
pharmacy. Preventive care, including annual medical exams, age-specific screenings and immunizations, is
covered at no cost to the member, no matter the medical plan chosen.
PREFERRED PROVIDER ORGANIZATION (PPO) PLANS
MCHCFs PPO plans use a network of preferred providers. A PPO plan allows members to use any provider,
but claim reimbursement is higher when utilizing the PPO network.
The PPO plans have network benefits that require a deductible be met before claims are paid at 90%.
Non-network benefit has higher out-of-pocket expenses. The out-of-pocket maximum ensures a member’s
annual medical expenses are capped.
HEALTH SAVINGS ACCOUNT PLAN (HSA PLAN)
MCHCP’s HSA Plan provides a tax-advantaged way to help non-Medicare primary members save for future
medical expenses.
The Internal Revenue Service establishes maximum annual HSA contribution amounts, but there is no
limit on the balance of the HSA. MCHCP contributes funds to active employee’s HSAs on an annual basis.
HSA funds can be used for qualified medical and pharmacy expenses. The HSA Plan uses the same network
of preferred providers that is used by the PPO plans. This plan has higher out-of-pocket medical expenses
than the PPO plans.
PRESCRIPTION DRUG PLANS
MCHCP medical plan members are automatically enrolled in the prescription drug plan (PDP). Medicare
Primary members are enrolled in a Medicare Part D PDP. Both non-Medicare and Medicare Primary PDPs
use a broad network of retail pharmacies and one specialty pharmacy. The drug formulary covers a wide
array of drugs and promotes the use of generics.
DENTAL PLAN
The dental plan offers a broad network of providers in the state. Preventive care, such as examinations and
cleanings, is covered at 100 percent and does not count toward the plan year maximum benefit amount.
Additional cleanings are provided for members who are pregnant, diabetic, have a suppressed immune
system or have a history of periodontal therapy. The plan also covers fillings, extractions, root canals,
bridges, dentures, crowns, the treatment of gum disease and other services with varying deductibles and
coinsurance.
2016 Annual Report 19
VISION PLAN
The vision plan offers set copayments for services received from network providers and allowances for
services obtained from non-network providers. The plan covers examinations, lenses, frames, contact lenses
and corrective laser surgery. Members can receive discounts on additional glasses and sunglasses from any
provider, accepting those discounts, within 12 months of an eye exam.
EMPLOYEE ASSISTANCE PROGRAM (EAP)
The Employee Assistance Program (EAP), is a confidential counseling and referral service that can help
employees and their families deal with life’s challenges. EAP services are available at no cost to all state
employees eligible for MCHCP medical coverage and members of their households. Members can keep
using EAP services for 18 months following retirement and through the month in which they are laid off
Household members can also use EAP services for six months after a subscriber’s death.
The program can help with issues such as stress, parenting, grief and loss and substance use, legal and
financial concerns, and identity theft and fraud resolution. The EAP also offers everyday support through
FamilySource" to assist with every day issues such as child and elder care, moving and relocation, making
major purchases, vacation planning and much more simply by calling or accessing expert help online.
STRIVE FOR WELLNESS® PROGRAM
The Strive for Wellness’ program provides evidence-based initiatives and resources designed to help most of
our members better understand and manage their health.
Major strategies focus on empowering members to proactively receive preventive health screenings,
manage chronic diseases, and to lead overall healthier lives. Strive for Wellness’ offers premium reductions
for eligible members who participate in the Partnership and Tobacco-Free Incentives.
In addition, the Strive for Wellness’ team - comprised of expert clinicians and health educators - teaches
employees how to make smart lifestyle choices. The team creates Healthy Moment Videos, Health Action
Campaigns and leads health-education events and related activities, such as blood pressure screenings and
an annual state employee 5K Run/Walk. Registered dietitians teach on-site weight management courses
several times each year and registered nurses lead quit tobacco courses in state office buildings.
In an effort to broaden wellness opportunities to all state employees, particularly in regions located outside
the capitol complex, wellness ambassadors and building wellness teams were created. These individuals
and groups help organize on-site activities and services, reaching more employees where they work.
20 EMBARK | Introduction
DISEASE MANAGEMENT
PROGRAM (DM)
The Disease Management (DM) program
encourages members with chronic conditions,
such as diabetes and coronary artery disease, to
participate in a telephonic, one-on-one nurse
coaching program. Members learn new ways
to control their conditions, and avoid health
crises and relapses that can lead to emergency
room visits. Nurses may communicate with a
member’s health care provider to share patient
progress with DM between office visits.
Members who participate in the diabetes DM
program receive additional support, including
four visits with a certified diabetes educator,
a glucometer, and no cost test strips and
lancets. Participants also have access to lower
prescription dmg copayments and coinsurance
for medications directly related to treating their
diabetes.
Members with other chronic conditions such as
obesity, asthma or congestive heart failure also
receive reduced non-formulary prescription
copayments or coinsurance when they
participate in a DM program.
STRIVE FOR WELLNESS®
HEALTH CENTER
The Strive for Wellness’ Health Center opened in
early 2014 in the Harry S Truman building. The
Center makes health care easily accessible to
employees enrolled in an MCHCP medical plan
by providing treatment for minor illnesses and
preventive care services.
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Guide
Financial
Report of Independent Auditors
Independent Auditor’s Report
Care Plan
Report on the Financial Statements
We have audited the accompanying financial statements of each of the two major funds of Missouri
Consolidated Health Care Plan (the “Plan”) as of and for the fiscal year ended June 30, 2016, which
collectively comprise the Plan’s basic financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with generally accepted accounting principles in the United States of America; this
includes the design, implementation, and maintenance of internal control relevant to the preparation
and fair presentation of financial statements that are tree from material misstatement, whether due to
error or fraud.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with generally accepted auditing standards in the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free fi'om material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor’s judgment,
including the assessment of the risks of material misstatement of the financial statements, whether
due to error or fraud. In making those risk assessments, the auditor considers internal control
relevant to the Plan’s preparation and fair presentation of the financial statements in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Plan’s internal control. Accordingly, we express no such opinion.
An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by management, as well as evaluating the
overall presentation of the financial statements.
BROWN
SMiTHI
WALLACE
Board of Trustees
Missouri Consolidated Healtl
Jefferson City, Missouri
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24 GUIDE I Financial
Opinion
In our opinion, the financial statements refeiTed to above present fairly, in all material respects, the
financial position of each major fund of the Plan as of June 30, 2016, and the respective changes in
financial position and cash flows for the fiscal year then ended in accordance with accounting
principles generally accepted in the United States of America.
Required Supplemental Information
U.S generally accepted accounting principles require management’s discussion and analysis and the
required supplementary infoimation as listed in the table of contents be presented to supplement the
basic financial statements. Such information, although not a part of the basic financial statements, is
required by the GASB, who considers it to be an essential part of the financial reporting for placing
the basic financial statements in an appropriate operational, economic, or historical context. We
have applied certain limited procedures to the required supplementary information in accordance
with generally accepted auditing standai'ds in the United States of America, which consisted of
inquiries of management about the methods of preparing the infoimation and compaiing the
information for consistency with management’s responses to our inquiries, the basic financial
statements, and other knowledge we obtained during our audit of the basic financial statements. We
do not express an opinion or provide any assurance on the information because the limited
procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
Introductory and Statistical Sections
Our audit was conducted for the purpose of forming an opinion on the financial statements that
collectively comprise the Plan’s basic financial statements. The introductory section and statistical
section are presented for purposes of additional analysis and are not a required part of the basic
financial statements. Such information has not been subjected to the auditing procedures applied in
the audit of the basic financial statements, and accordingly, we do not express an opinion or provide
any assurance on them.
^ llp
St. Louis, Missouri
December 2, 2016
2016 Annual Report 25
Management's Discussion & Analysis
This section of the annual financial report provides an overview and analysis of the financial activities of
the Missouri Consolidated Health Care Plan (MCHCP) for the fiscal years ended June 30, 2016 and 201 5.
We encourage you to consider the information presented here in conjunction with additional information
presented in the basic financial statements which follow this section.
Fiscal year ended June 30, 2016 became the ninth year of presentation for the adoption of the provisions
of Governmental Accounting Standards Board (GASB) Statement #43, Financial Reporting for Postemployment
Benefit Plans Other Than Pension Plans. Implementation was not required until fiscal year 2008 because
MCHCP previously accounted and reported for its activities under GASB #10, Accounting and Financial
Reporting for Risk Financing and Related Insurance Issues. GASB #10 was amended by GASB #45 but remained
in effect for accounting for healthcare benefits to retirees until the effective date of GASB #45. Thus, GASB
#45 was effective for MCHCP’s fiscal year ended June 30, 2008.
As a result of implementation, MCHCP created a separate fiduciary trust fund (State Retiree Welfare
Benefit Trust or SRWBT) to handle the post-employment benefits for state employees. Prior to that time,
the Internal Service Fund (ISF) of MCHCP handled the activity of both active and retired participants. For
the current fiscal year, even though there was no significant change from an operational aspect, the net
position and activity related to active participants is reported in the ISF and the net position and activity
related to retired participants is reported in the SRWBT in the accompanying financial statements.
FUND ACCOUNTING
A fund is a grouping of related accounts that is used to maintain control over resources that have been
segregated for specific activities or objectives. MCHCP, like other discretely presented component nnits of
the State of Missouri (as defined by GASB Statement #14), uses fund accounting to ensure and demonstrate
compliance with finance-related legal requirements. There are three categories available for governmental
accounting: governmental funds, proprietary funds and fiduciary funds. The ISF is considered to be a
proprietary fund while SRWBT is classified as a fiduciary fund. MCHCP does not have any governmental
funds.
Proprietary funds. Proprietary funds account for governmental operations that are designed to be self-
supporting from fees charged to consumers for the provision of those goods and services or where the
government has decided that the periodic determination of revenues, expenses, and net income is
appropriate for capital maintenance, public policy, management control, accountability, or other purposes.
The accounting and financial reporting practices of proprietary funds are similar to those used for business
enterprises and focus on capital maintenance and the flow of economic resources through the use of
accrual accounting. Of the two types of proprietary funds, MCHCP maintains one type: internal service
fund. Internal service funds acconnt for the financing of goods or services provided by one governmental
department or agency to another and are expected to be self-supporting through charges to users. MCHCFs
purpose is to provide medical insurance benefits to the State of Missouri’s and other participating Missouri
public entities’ employees, retirees, and their dependents.
26 GUIDE I Financial
Fiduciary funds. Fiduciary funds account for assets held in a trustee or agency capacity for others and,
therefore, cannot be used to support the government’s own programs. Fiduciary fund accounting is similar
to that used for proprietary funds. The purpose of the SRWBT is to provide health and welfare benefits
for the exclusive benefit of current and retired employees of the State and their dependents who meet
eligibility requirements, except for those retired members covered by other post-employment benefit
(OPEB) plans of the State.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis are intended to serve as an introduction to the Plan’s basic financial
statements. Typically, governmental financial statements would be presented as three components:
1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial
statements. However, because the Plan has only proprietary and fiduciary funds, government-wide
financial statements are not presented. Proprietary funds present financial statement information in
the same manner as government- wide financial statements only with more detail, and government- wide
financial statements would be repetitive. In addition, fiduciary funds are not reflected in government-
wide financial statements because the resources of that fund are not available to support MCHCFs own
programs.
MCHCP presents the ISF and SRWBT on separate fund financial statements. For the ISF, the basic financial
statements are comprised of the Statement of Net Position; the Statement of Revenues, Expenses and
Changes in Net Position; and the Statement of Cash Flows. For SRWBT, the basic financial statements
are comprised of the Statement of Fiduciary Net Position and the Statement of Changes in Fiduciary Net
Position. The Notes to the Financial Statements are also part of the basic financial statements and apply
to both the ISF and SRWBT. The financial statements are prepared on the accrual basis in accordance with
U.S. generally accepted accounting principles applicable to governmental benefit plans.
The Statement of Net Position and Statement of Fiduciary Net Position present MCHCFs financial
position as of the end of the fiscal year for each fund. Information is displayed as assets and liabilities,
with the difference between the two reported as net position or deficit. The net position of MCHCP reflect
the resources available as of the end of the fiscal year to pay benefits to members when due. Over time,
increases and decreases in net position measure whether MCHCFs financial position is improving or
deteriorating.
The Statement of Revenues, Expenses and Change in Net Position and the Statement of Changes in
Fiduciary Net Position present information detailing the revenues and expenses that resulted in the
change in net position that occurred during the current fiscal year. All revenues and expenses are reported
on an accrual basis. This means that the revenue or expense is recognized as soon as the underlying event
giving rise to the change occurs, regardless of when the actual cash is received or paid. Thus, revenues and
expenses are reported in this statement for some items that will not result in cash flows until future fiscal
periods. For example, contributions due from a public entity, even though not yet paid by year end, will be
reflected as revenue. Likewise, claims that occurred during the fiscal year under self-funded plans will be
reflected as an expense, whether or not they have been paid as of the end of the fiscal year.
2016 Annual Report 27
The Statement of Cash Flows presents the cash inflows and outflows of the ISF categorized by operating,
capital and related financing, and investing activities. It reconciles the beginning and end of year cash
balances contained in the Statement of Net Position. The effects of accrual accounting are adjusted out and
noncash activities, such as depreciation, are removed to supplement the presentation in the Statement of
Revenue, Expenses and Change in Net Position. A statement of cash flows is not required for the SRWBT.
The Notes to Financial Statements follow the above basic financial statements and provide additional
information that is essential to a full understanding of the data provided in the financial statements.
FINANCIAL ANALYSIS
The following tables present summarized financial position and results for the fiscal years ending June 30,
2016 and 2015. Additional details are available in the accompanying basic financial statements.
Summary Comparative Statements of Net Position
Current assets for the ISF decreased for the year ended June 30, 2016 due to changes in cash and cash
equivalents as a result of operating activities. Capital asset activity has been minimal as operations have not
changed significantly during the years presented.
With the adoption of GASB Statement No. 68, Accounting and Financial Reporting for Pensions during fiscal year
ended June 30, 201 5, the Plan has recognized deferred outflows of resources for pension contributions made
and expensed of $967,148 and $539,717, respectively for the periods ended June 30, 2016 and 2015.
Accrued medical claims and fees increased for the ISF for the year ended June 30, 2016 over 201 5, due
primarily to an increase in the IBNR (incurred but not reported) estimate related to the current pattern of
expected medical claims expenditures. Health risk profiles of plan participants remained relatively stable for
the period and estimates are reflective of the active enrollment and medical trend projections during the year.
Unearned premiums and other liabilities for the periods ended June 30, 2016 and 201 5 are primarily
influenced by the State’s contribution at June 30th for each of the years ended and the level of contribution
applicable to each receipt. For the ISF unearned premiums at June 30, 2016, increased by approximately four
percent over fiscal year 201 5, due primarily to the State’s contribution at June 30, 2016 and the respective
levels of appropriated funding from the State included with these receipts. Unearned premiums and other
liabilities are most significantly influenced by the state’s payroll cycle and the amount and timing of receipt of
premium payments to MCHCP prior to the effective date of coverage.
Noncurrent liabilities existing at June 30, 2016 and 2015 reflect the Plan’s net pension liability related to the
implementation of GASB 6 8, Accounting and Financial Reporting for Pensions.
Net position represents the value of the ISF’s assets after liabilities are deducted. The decrease in net position
for the ISF at June 30, 2016 over 201 5, is primarily the result of increases in medical and pharmacy expenses
associated with utilization and claim unit costs and their impact on plan assets and liabilities.
28 GUIDE I Financial
Summary Comparative
Net Position
Internal Service Fund
As of
June 30, 2016
As of
June 30, 2015
Amount
of Change
Percentage
Change
Current assets
$193,798,783
$211,234,466
($17,435,683)
(8.25%)
Capital assets
221,396
304,082
(82,686)
(27.19)
Deferred Outflow
of Resources
967,148
539,717
427,431
79.20
Total Assets and Deferred
Outflow of Resources
$194,987,327
$212,078,265
($17,090,938)
(8.06%)
LIABILITIES
Accrued medical claims & fees
$45,047,622
$37,275,405
$7,772,217
20.85%
Unearned premiums &
other liabilities
35,921,221
34,568,556
1,352,665
3.91
Total current liabilities
80,968,843
71,843,961
9,124,882
12.70
Total noncurrent liabilities
5,133,995
3,718,667
1,415,328
38.06
Deferred Inflow of
Resources
101,543
1,084,272
(982,729)
(90.63)
Total Liabilities and
Deferred Inflow of
Resources
$86,204,381
$76,646,900
$9,557,481
1 2.47%
NET POSITION
Unrestricted
$108,561,550
$135,127,283
($26,565,733)
(19.66%)
Net investment in capital assets
221,396
304,082
(82,686)
(27.19)
Total Net Position
108,782,946
135,431,365
(26,648,419)
(19.68)
Total Liabilities and
Net Position
$194,987,327
$212,078,265
($17,090,938)
(8.06%)
2016 Annual Report 29
Summary Comparative Statement of Fiduciary Net Position
Cash and cash equivalents decreased primarily to the timing of investment strategies and activity as
approved by the Board of Trustees and performed by the Plan’s investment manager. Investments
increased at June 30, 2016, by over 3 percent due to the overall performance of the fund and the
concentration mix of scheduled available assets.
Prescription drug rebates for the SRWBT increased during fiscal year 2016, as a result of the Plan’s
increases in pharmacy and specialty drug expenditures and the related direct and coverage gap discounts
associated with those payments. Contractual improvements associated with pharmacy market check
provisions increased per script returns while bolstering rebate revenues.
Contractual market check provisions associated with retail brand scripts increased prescription drug
rebates for the SRWBT and are the primary influencers of the increase in net position at June 30, 2016, to
approximately $117 million compared to $106.9 million at June 30, 201 5.
30 GUIDE I Financial
Summary Comparative
Fiduciary Net Position
State Retiree Welfare Benefit Trust
As of
June 30, 2016
As of
June 30, 2015
Amount
of Change
Percentage
Change
Cash and cash equivalents
$2,313,857
$3,401,626
($1,087,769)
(31.98%)
Due from MCHCP
14,373,197
13,459,620
913,577
6.79
Investments, at fair value
101,819,021
98,808,072
3,010,949
3.05
RECEIVABLES
Prescription drug rehates
$12,586,054
$4,393,204
$8,192,850
186.49%
Other receivables
266,384
301,807
(35,423)
(11.74)
Total receivables
12,852,438
4,695,011
8,157,427
173.75
Total Assets
$131,358,513
$120,364,329
$10,994,184
9.13%
LIABILITIES
Accrued medical claims
& capitation fees
$10,107,000
$7,781,000
$2,326,000
29.89%
Unearned revenue
3,917,668
3,714,698
202,970
5.46
Other liabilities
348,529
1,963,922
(1,615,393)
(82.25)
Total Liabilities
$14,373,197
$13,459,620
$913,577
6.79%
Net Position, held in trust
for other post-employment
benefits
$116,985,316
$106,904,709
$10,080,607
9.43%
2016 Annual Report 31
Summary Comparative Statements of Revenue, Expenses & Changes in Net Position
State/Employer contributions for fiscal years 2016 and 2015, for the ISF totaled $324,857,578 and
$324,630,770, respectively. Funding for the years represented are attributable to the State's appropriation
to fund the claims costs and operations expense attributable to State employee health benefits. Ultimately,
claims costs for state employees are backed by the State of Missouri should State/Employer contributions
not be sufficient to cover claims needs.
Member contributions for the ISF for the years ended June 30, 2016 and 201 5, are influenced primarily
by total enrollment, the mix of enrollment, the relative plan design for the respective years, and the State’s
commitment to providing a pathway for maintaining premium contributions through employer subsidy
and employee participation in wellness initiatives.
Public entity emollment at June 30, 2016, decreased approximately five percent over enrollment at June
30, 201 5, although public entity contributions remained relatively stable due to the mix of enrollment
for the year contributions for the years ended June 30, 2016 and 201 5, were $7,904,470 and $8,063,991,
respectively.
Subcontractor rebates increases at June 30, 2016 over 201 5 are primarily influenced by the Plan’s
prescription drug expenditures, active enrollment, and the related contractual rebate improvements.
Medical claims and capitation expense increased by over seven percent during fiscal year 2016, and
was primarily related to the Plan’s increased expenditures for pharmacy and specialty drugs, medical
utilizations and anticipated fluctuations in medical claims trends.
32 GUIDE I Financial
Summary Comparative Statement of
Revenue^ Expenses & Changes in Net Position
Internal Service Fund
Year ended
June 30, 2016
OPERATING REVENUES
State/employer contributions
$324,857,578
State employee/member
contributions
83,815,598
Public entity contributions
7,904,470
Subcontractor & other rehates
13,500,867
Total Operating Revenues
$430,078,513
OPERATING EXPENSES
Medical claims & capitation
expense
$450,689,581
General & administration
expense
7,210,395
Total Operating Expenses
$457,899,976
Operating income
(27,821,463)
Investment income & other
changes
1,173,043
Excess of revenues over expenses
(26,648,420)
Year ended
Amount
Percentage
June 30, 2015
of Change
Change
$324,630,770
$226,808
0.07%
83,734,256
81,342
0.10
8,063,991
(159,521)
(1.98)
5,689,731
7,811,136
137.28
$422,118,748
$7,959,765
1.89%
$419,469,510
$31,220,071
7.44%
7,116,219
94,176
1.32
$426,585,729
$31,314,247
7.34%
(4,466,981)
(23,354,482)
522.82
735,595
437,448
59.47
(3,731,386)
(22,917,034)
614.17
139,162,752
(3,731,386)
(2.68)
Net position, beginning of the
year, adjusted 135,431,366
Net Position,
end of year $108,782,946 $135,431,366 ($26,648,420) (19.68%)
2016 Annual Report 33
Summary Comparative Statement of Changes in Fiduciary Net Position
Employer contributions for the SRWBT for the years ended June 30, 2016 and 201 5, respectively were
$66,199,740 and $62,585,666 and are attributable to the State's appropriation to fund the claims costs and
operations expense attributable to State employee retiree health benefits. Ultimately, claims costs for state
employees are backed by the State of Missouri should State/Employer contributions not be sufficient to
cover claims needs.
Beginning in calendar year 2014, MCHCP began participating in a Medicare Prescription Drug Plan (PDP)
to provide coverage to Medicare-primary retirees and dependents. The program anticipates greater savings
to the employer over the historical retiree drug subsidy (RDS). During fiscal years 2016, and 201 5 the
SRWBT received $29,696,367 and $14,865,605 for rebates and subsidies associated with the Medicare PDP.
Medical claims and capitation expense increased for the SRWBT by over 10 percent during fiscal year 2016,
primarily due to increased retiree enrollment in the SRWBT and the Plan’s increased expenditures for
pharmacy and specialty drugs and anticipated fluctuations in medical claims activity and trends.
Summary Comparative Statement of
Change in Fiduciary Net Position
State Retiree Welfare Benefit Trust
Year ended
Year ended
Amount
Percentage
June 30, 2016
June 30, 2015
of Change
Change
ADDITIONS
Employer contributions
$66,199,740
$62,585,666
$3,614,074
5.77%
Retiree contributions
51,446,647
50,343,105
1,103,542
2.19
Investment income
2,275,792
4,003,656
(1,727,864)
(43.16)
Retiree drug subsidy & other
rebates
29,696,367
14,865,605
14,830,762
99.77
Total Additions
$149,618,546
$131,798,032
$17,820,514
13.52%
DEDUCTIONS
Medical claims & capitation
expense
$131,451,967
$118,668,233
$12,783,734
10.77%
Claims administration services
4,892,410
5,865,488
(973,078)
(16.59)
Administration & other
3,193,562
2,632,026
561,536
21.33
Total Deductions
$139,537,939
$127,165,747
$12,372,192
9.73%
Net increase
10,080,607
4,632,285
5,448,322
117.62
Net position held in trust for other
post-employement benefits
Beginning of year
106,904,709
102,272,424
4,632,285
4.53
End of year
$116,985,316
$106,904,709
$10,080,607
9.43%
2016 Annual Report 3S
SUMMARY
MCHCP remains committed to providing comprehensive and affordable health care to the members we
serve, effectuating sound fiscal practices as stewards of Plan resources, and remaining diligent in our efforts
in providing member education to facilitate member satisfaction and cost containment. Wellness and
disease management programs were introduced and incorporated in an effort to promote healthy member
outcomes and to promote cost containment. Operating expenses and vendor costs remained relatively
stable due to competitive procurement with investments in technology and automation in Plan operations.
Medical and pharmacy cost increases reflect expected fluctuations due to the emergence of specialty drug
cost prevalence and normal medical claim trends. Increases associated with self-funded expenditures, are
indicative of the attention to health risk profiles of the MCHCP population and management initiatives
surrounding benefit design, disease management and wellness. In March of 2014, the Plan launched
the Strive for Wellness* Health Center as an additional effort to promote appropriate utilization, provide
members with additional access to services, while continuing to pursue avenues for cost containment.
The health center realized a near breakeven in its initial full year of operation while reporting optimum
member satisfaction results and continues to provide opportunities for members to pursue health
management.
MCHCFs cash is invested conservatively to preserve principal and maintain liquidity. In addition, the
Plan utilizes a master investment policy and instruments are predicated on an asset allocation model
approved by the Board of Trustees. Investment income for the ISF and SRWBT consists of interest
income, unrealized gains and losses in fair value, accretion of discounts, and amortization of premiums.
Investment income for the ISF and the SRWBT in total was realized in the amount of $3,437,310 and
$4,739,251 for the fiscal year’s ended June 30, 2016 and 2015, respectively, and is predicated on the
availability of investable assets and the economic conditions influencing market conditions.
MCHCP’s actuary reviews the financial assets of MCHCP in conjunction with obligations and the funding
available as provided by the Missouri General Assembly. Due to the state of economic conditions facing
the State, the MCHCP, members of the General Assembly, and the State’s Office of Budget and Planning
meet regularly to discuss funding needs and projected claims expenditures in an effort to develop funding
levels for the Plan. Ultimately, the funding of claims costs are backed by the State of Missouri should
contributions be unable to meet claims obligations.
During the years presented, MCHCP faced a tightened State budget, which compelled it to continue
to pursue opportunities in cost containment, member engagement in healthy outcomes and changes
to benefit offerings. Combined with expected continued escalation in health care costs, MCHCP faces
significant challenges in an effort to provide affordable health care coverage to its members. As a result,
MCHCP has explored a full range of viable options to accommodate the State budget while continuing to
offer comprehensive and affordable coverage to its members. Wellness and disease management programs
that encourage member engagement are the progressive instrument to continue to foster healthier
outcomes and reduce claims expenditures. MCHCP’s wellness incentives are designed to incorporate and
promote best in class initiatives. The overall financial position of MCHCP is reliant upon state funding,
cost containment and comprehensive benefits review of the self-funded programs to continue to generate a
healthier membership in MCHCP.
36 GUIDE I Financial
Katy Trail
Rocheport, MO
REQUESTS FOR
INFORMATION
This financial report is designed to provide
a general overview of MCHCFs financial
position for all those with an interest in
MCHCP. Questions concerning any of the
information provided in this report or requests
for additional information should be addressed
to the Missouri Consolidated Health Care Plan,
832 Weathered Rock Court, PO Box 1043 55,
Jefferson City, Missouri 65110-4355.
Statement of Net Position
Internal Service Fund as of June 30, 2016
ASSETS
Current Assets
Cash & cash equivalents
$148,272,142
Investments, at fair value
37,858,277
Rebates & other receivables
7,535,204
Prepaid expenses
133,160
Total Current Assets
$193,798,783
Noncurrent Assets
Capital Assets
Furniture, fixtures & equipment.
net of accumulated depreciation of $2,434,462
221,396
Total Noncurrent Assets
$221,396
Deferred Outflow of Resources
967,148
Total Assets and Deferred Outflow of Resources
$194,987,327
1
Current Liabilities
Accrued medical claims & capitation fee expense
$45,047,622
Accounts payable & accrued expenses
1,927,986
Due to SRWBT
14,373,197
Deferred premium revenue
19,620,038
Total Current Liabilities
$80,968,843
Noncurrent Liabilities
Net Pension Liability
5,133,995
Total Noncurrent Liabilities
$5,133,995
Deferred Inflow of Resources
101,543
Total Liabilities and Deferred Inflow of Resources
$86,204,381
Net Position
Unrestricted
$108,561,550
Accounts payable & accrued expenses
221,396
Total net position
$108,782,946
Total Liabilities, Deferred Inflow of Resources and Net Position
$194,987,327
The accompanying notes are an integral part of the financial statements.
38 GUIDE I Financial
Statement of Revenues^ Expenses &
Change in Net Position
Internal Service Fund year ended June 30, 2016
Operating Revenues
State/employer contributions
Member contributions
Public entity contributions
Pharmacy rebates
Total Operating Revenues
$324,857,578
83,815,598
7,904,470
13,500,867
$430,078,513
Operating Expenses
Medical claims & capitation expense
Claims administration services
Payroll & related benefits
Health management
Administration
Professional services
Employee Assistance Program
Total Operating Expenses
Operating revenues over (under) operating expenses
$437,471,527
13,218,054
3,192,904
1,719,724
740,609
962,817
594,341
$457,899,976
(27,821,463)
Non-Operating Revenues
Investment & other income
Change in net position
Net position, beginning of year
1,173,043
(26,648,420)
135,431,366
Net Position, End of Year
$108,782,946
The accompanying notes are an integral part of the financial statements.
2016 Annual Report 39
Statement of Cosh Flows
Internal Service Fund year ended June 30, 2016
Cash Flows from Operating Activities
Cash received from employer & members
$425,867,692
Cash payments for medical claims & capitation fee payments
(429,699,311)
Cash payments to employees for services
(3,187,737)
Cash payments to other suppliers of goods & services
(16,644,549)
Net Cosh Used by Operating Activities
($23,663,905)
Cosh Flows from Noncapital Financing Activities
Changes in amounts due to SRWBT
913,577
Cash Flows from Capitol & Related Financing Activities
Purchase of furniture, fixtures & equipment
(38,025)
Cash Flows from Investing Activities
Cash received from investment income; net of investment expenses
1,034,803
Purchase of investments
(12,725,825)
Proceeds from investments
12,329,854
Net cash provided by Investing Activities
638,832
Net decrease in Cash & Cash equivalents
(22,149,521)
Cash & Cash Equivalents, Beginning of Year
170,421,663
Cash & Cash Equivalents, End of Year
$148,272,142
Reconciliation of Operating Loss to
Net Cosh Used by Operating Activities
Operating revenues under operating expenses
(27,821,462)
Adjustments
Adjustments to net cash used by operating activities
Depreciation
120,711
Pension expense
Changes in Assets & Liabilities
519,586
Rebates & other receivables
(4,094,036)
Prepaid expenses
(85,589)
Accrued medical claims & capitation fees
7,772,217
Accounts payable & accrued expenses
555,874
Unearned premium revenue
(116,786)
Deferred outflows - contributions after the measurement date
(514,420)
Total Adjustments
4,157,557
Net Cash Used By Operating Activities
($23,663,905)
Noncash investing, capital & financing activities
Change in fair value of investments
(181,608)
The accompanying notes are an integral part of the financial statements.
40 GUIDE I Financial
Statement of Fiduciary Net Position
State Retiree Welfare Benefit Trust as of June 30, 2016
ASSETS
Cash & cash equivalents
Due from MCHCP
Investments, at fair value
Mutual Funds
Equities
Corporate
Collateralized Mortgage Obligations
U.S. Government Guaranteed Mortgages
U.S. Agencies
U.S. Agencies
Receivables
Prescription drug rebates
Retiree drug subsidy
Other receivables
Total Assets
LIABILITIES
Accrued medical claims & capitation fees
Unearned revenue
Other Liabilities
Total Liabilities
Net Position, Held in Trust For Other
$2,313,857
14,373,197
22,112,997
17,704,624
10,814,143
13,377,839
16,225,665
19,475,632
2,108,121
12,586,054
266,384
$131,358,513
$10,107,000
3,917,668
348,529
$14,373,197
-Employment Benefits $116,985,316
The accompanying notes are an integral part of the financial statements.
42 GUIDE I Financial
Statement of Change in Fiduciary Net Position
State Retiree Welfare Benefit Trust as of June 30, 2016
Additions
Employer contributions
Retiree contributions
Investment income
Retiree drug subsidy & other rebates
Total Additions
$66,199,740
51,446,647
2,275,792
29,696,367
$149,618,546
Deductions
Medical claims & capitation expense
Claims administration services
Administration & other
Total Deductions
$131,451,967
4,892,410
3,193,562
$139,537,939
Net Increase
Net Position Held in Trust for Other Post Employment Benefits
Beginning of Year
10,080,607
106,904,709
End of Year
$116,985,316
The accompanying notes are an integral part of the financial statements.
2016 Annual Report 43
Notes to Financial Statements
1. GENERAL INFORMATION
The Missouri Consolidated Health Care Plan or the
Plan was statutorily created and organized on January
1, 1994, with the purpose of providing medical
insurance benefits to the State of Missouri’s (State)
employees, retirees and their dependents as well as
other Missouri public entity employees, retirees and
their dependents. Prior to 1994, medical insurance
benefits for the State’s employees, retirees and their
dependents were provided by Missouri State Employees’
Retirement System (MOSERS) medical care plan. On
January 1, 1994, through a transfer agreement between
the Plan and MOSERS, all medical care plan assets and
liabilities were transferred to the Plan.
The Plan currently has approximately 9 5,000 active
and retired State members and dependents, 1,078
public entity members and dependents, and more
than 96,000 covered lives, and is funded through
both employer and employee contributions. Through
December 31, 1994, all Plan members were State
employees, retirees and their dependents. Beginning
January 1, 1995, additional members included public
entity employees, retirees and dependents.
State contribution rates are based on the State’s
approved appropriation and the number of anticipated
participants. State employee and public entity
contribution rates are established by the Plan’s Board of
Trustees based on contractor bids for the plan year and
budgeted employer contributions.
MCHCP is a risk pool and administers an “agent
multiple employer plan” because each employer
remains individually responsible for financing its own
commitment to provide benefits to its participants,
including any eligible retirees. As a result of the
implementation of GASB Statement No. 43, Accounting
and Financial Reporting for Postemployment Benefits Other
than Pensions, MCHCP created a separate fiduciary trust
fund (State Retiree Welfare Benefit Trust, or SWRBT)
to handle the post-employment benefits for State
employees.
SRWBT was established and organized on June 27,
2008, pursuant to the Revised Statutes of Missouri
(2000) as amended (“RSMo”) 103.003 through 103.178
to provide health and welfare benefits for the exclusive
benefit of current and future retired employees of
the State and their dependents who meet eligibility
requirements except for those retired members covered
by other post-employment benefit (OPEB) plans of
the State. The SRWBT is considered a cost-sharing
multiple employer plan because it covers various State
agencies and legally separate component units. It is
administered by Plan staff under the direction of the
Plan Board of Trustees. The SRWBT does not issue a
separate audited financial report.
Beginning June 30, 2009, the net position and activity
related to active participants are reported in the
Internal Service Fund (ISF), and the net position and
activity related to retired participants are reported in
the SRWBT in the accompanying financial statements.
In the following footnotes, the term “the Plan refers to
both the ISF and SRWBT. Disclosures that are specific
to the ISF or SRWBT are separately noted.
The Plan is considered a part of the State’s financial
reporting entity and is included in the State’s financial
report as a component unit. As the Plan is considered a
political subunit of the State and provider of essential
governmental services, it is not subject to federal
income taxes, nor to the provisions of the Employee
Retirement Income Security Act of 1974. The Plan is
administered according to Missouri statutes. These
statutes do not include a provision for the termination
of the Plan.
The preparation of financial statements in conformity
with U.S. generally accepted accounting principles
(GAAP) requires management to make estimates and
assumptions that affect the reported amounts of assets
44 GUIDE I Financial
and liabilities; the disclosure of contingent assets and
liabilities at the date of the financial statements; and
the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from
those estimates.
2. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
A. Basis of Accounting
The financial statements of the ISF are intended to
present the financial position and the changes in cash
flows of only that portion of the activities attributable
to the transactions of the ISF. The ISF is accounted for
as a proprietary fund.
The Plan’s financial statements for the ISF were
prepared using the accrual basis of accounting,
in accordance with GAAP, as prescribed by the
Governmental Accounting Standards Board (GASB).
GASB Statement No. 20, Accounting and Financial
Reporting for Proprietary Funds and Other Governmental
Entities That Use Proprietary Fund Accounting, establishes
the GAAP hierarchy for proprietary funds. The
statement requires that proprietary activities apply
to all applicable GASB pronouncements. The Plan
implemented GASB Statement No. 63, Financial
Reporting of Deferred Outflows of Resources, Deferred
Inflows of Resources, and Net Position for the fiscal year
ended June 30, 2013. The objective of the statement
is to provide guidance for reporting deferred outflows
of resources, deferred inflows of resources, and net
position in a statement of financial position and
related disclosures. Effective for fiscal year ended
June 30, 201 5, the Plan adopted GASB Statement
No. 68, Accounting and Financial Reporting for Pensions
- an amendment to GASB Statement No. 27, which
enhances accounting and financial reporting by
state and local governments for pensions and
improves information provided by the state and local
governmental employers about financial support for
pensions provided by other entities. The Plan now
recognizes a long term liability for the net pension
liability in the Statement of Net Position. See Note J for
additional details regarding the Plan’s retirement plan.
Effective for fiscal year ended June 30, 2016, the
Plan adopted GASB Statement No. 72, Fair Value
Measurement and Application, which intends to improve
financial reporting by requiring governments to
account and report utilizing a consistent and more
detailed definition of fair value and accepted valuation
techniques. Adoption resulted in additional note
disclosures in Note C to display investments by the
category of measurement hierarchy.
The financial statements of the SRWBT are intended to
present the financial position and the changes in cash
flow of only that portion of the activities attributable to
the transactions of the SRWBT.
Benefits and refunds of the SRWBT are recognized
when due and payable in accordance with the terms of
the plan. The SRWBT is accounted for as a fiduciary
fund. Accordingly, the financial statements are
prepared using the accrual basis of accounting in
conformity with GAAP.
B. Method Used to Value Investments
Investments are reported at fair value on a trade-date
basis with changes in fair value recorded in investment
income on the statement of revenues, expenses and
change in net position. Investments are recorded
at fair value as determined by quoted market price,
when available, or estimated fair value when not
available. Many factors are considered in arriving at
that fair market value. In general, however, bonds and
mortgage backed securites are valued based on yields
currently available on comparable securities of issuers
2016 Annual Report 45
with similar credit ratings. Realized gains and losses
are based on the specific identification basis. The
calculation of realized gains and losses is independent
of the calculation of the change in net unrealized gains
and losses.
C. Deposits & Investments
The Plan considers all highly liquid investments,
readily convertible into cash with original maturities of
three months or less, to be cash equivalents.
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the
event of the failure of a depository financial institution,
the Plan would not be able to recover deposits or
collateral securities in the possession of an outside
party. In an effort to mitigate custodial credit risk, the
Plan requires the bank to sweep the accounts each night
into overnight repurchase agreements for which the
underlying securities must be of the type approved by
the State. All remaining cash balances are to be insured
or appropriately collateralized.
Custodial credit risk for investments is the risk that,
in the event of the failure of the counterparty to the
transaction, the Plan would not be able to recover the
value of investments or collateral securities in the
possession of an outside party. The Plan does not have a
formal policy regarding custodial credit risk. However,
the bank acting as the investment manager has been
approved by the Plan’s Board of Trustees.
Deposits
Cash balances represent operating bank account
balances. To maximize investment income, the float
caused by outstanding checks is invested in overnight
repurchase agreements, thus causing a negative
carrying value.
At June 30, 2016, cash held in the financial institution
had a bank balance of $ 5 5,749 and a carrying value
of ($13,433,628). Of the bank balance, $5 5,749 was
covered by federal depository insurance. The remaining
$164,019,627 of cash and cash equivalents are held in
repurchase agreements and fully collateralized with
securities held by a third-party financial institution in
the Plan’s name.
The Plan’s contracted yield on its overnight repurchase
agreements was 1 5 basis points above the prevailing 91-
day U.S. Treasury Bill rate as of June 30, 2016.
Investments
The Plan’s investment policy for the ISF is predicated
on the primary objectives of safety, liquidity, and
yield, in order of priority. Investments in bankers’
acceptances and commercial paper are required to
mature and become payable not more than 180 days
from the date of purchase. All other investments are
required to mature and become payable not more than
five years from the date of purchase. The weighted
average life should not exceed three years and should
be consistent with the investment objectives.
The Board of Trustees adopted an asset allocation
model for the SRWBT that implemented a moderate
investment approach allocating 33 percent to equities.
This approach was approved to steadily increase the
exposure of the SRWBT to higher return asset classes
over time. Exposure to equities will be through a
combination of actively managed index funds and/
or exchange traded funds that are highly rated and
reviewed regularly. Allocations are back-tested, and
future assets are projected in all models. The Plan
follows the “prudent person” rule for investment
decisions. Essentially, the Plan operates as a prudent
person acting in a like capacity and familiar with
similar matters would act in the conduct of an
enterprise of a like character and with like aims. Any
person with fiduciary responsibilities with respect to
the Plan is covered by this “prudent person” rule. As of
June 30, 2016, the Plan had the following investments
as presented on the following page.
46 GUIDE I Financial
Investments
Internal Service Fund
2016
Investments
Market Value
U.S. Agencies
$18,328,147
U.S. Government Guaranteed Mortgages
2,268,986
U.S. Treasury
17,261,144
Total Investments
$37,858,277
Investments
State Retiree Welfare Benefit Trust
2016
Investments
Market Value
U.S. Agencies
$19,475,632
U.S. Government Guaranteed Mortgages
16,225,665
Corporate
10,814,143
Collateralized Mortgage Obligations
13,377,839
Equities
17,704,624
Mutual Funds
22,112,997
U.S. Treasury
2,108,121
Total Investments
$101,819,021
2016 Annual Report 47
Concentration of Credit Risk
Credit Risk
Concentration of credit risk is the risk of loss attributed
to the magnitude of the ISF’s investment in a single
issue. To mitigate this risk, the ISF’s investment policy
provides general guidelines on diversification.
Investments in U.S. Treasuries and securities,
collateralized time and demand deposits, and
collateralized repurchase agreements can constitute
up to 100 percent of the investment portfolio; U.S.
government agencies, including mortgage-hacked
securities, cannot exceed 60 percent of the portfolio;
and U.S. government agency callable securities,
bankers’ acceptances and commercial paper cannot
exceed 30 percent of the portfolio. The SRWBT has
implemented an investment approach allocating 33
percent to equities.
Credit risk is the risk that an issuer or other
counterparty to an investment will not fulfill its
obligation. The Plan minimizes this risk by only
authorizing investment types approved by the
Treasurer of the State of Missouri, limiting investments
to the safest types of securities, and diversifying the
portfolio so potential losses on individual securities
will be minimized. The Plan’s investments by credit
rating category as of June 30, 2016 are presented on the
following page.
48 GUIDE I Financial
Credit Risk
Internal Service Fund
2016
2016
Investments
Market Value
Ratings
U.S. Agencies
$18,328,147
Aaa
U.S. Government Guaranteed Mortgages
2,268,986
Aaa
U.S. Treasury
17,261,144
Aaa
Total Investments
$37,858,277
Credit Risk
State Retiree Welfare Benefit Trust
2016
2016
Investments
Market Value
Ratings
U.S. Agencies
$19,475,632
Aaa
U.S. Government Guaranteed Mortgages
16,225,665
Aaa
Corporate
10,814,143
A+
Collateralized Mortgage Obligations
13,377,839
Aaa
Equities
17,704,624
A
Mutual Funds
22,112,997
3-Star
U.S. Treasury
2,108,121
Aaa
Total Investments
$101,819,021
2016 Annual Report 49
Interest Rate Risk
Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The Plan
minimizes this risk hy structuring the portfolio so securities mature to meet cash requirements for ongoing operations,
using cash flow modeling to moderate the interest rate risk hy reducing any unanticipated security sales that could
result in a loss of principal and, maintaining the operating funds primarily in repurchase agreements according to the
hanking contract.
For the interest rate risk measurement for the Plan, Central Bank employs the duration method. The maturities of the
Plan’s investments as of June 30, 2016 are presented below.
Interest Rate Risk
Internal Service Fund
2016
2016
Investments
Market Value
Duration
U.S. Agencies
$18,328,147
2.09
U.S. Government Guaranteed Mortgages
2,268,986
2.44
U.S. Treasury
17,261,144
2.09
Total Investments
$37,858,277
Interest Rate Risk
State Retiree Welfare Benefit Trust
2016
2016
Investments
Market Value
Duration
U.S. Agencies
$19,475,632
4.90
U.S. Government Guaranteed Mortgages
16,225,665
4.78
Corporate
10,814,143
5.74
Collateralized Mortgage Obligations
13,377,839
3.47
Equities
17,704,624
-
Mutual Funds
22,112,997
-
U.S. Treasury
2,108,121
6.65
Total Investments
$101,819,021
SO GUIDE I Financial
Foreign Currency Risk
Foreign currency risk is the risk that changes in
exchange rates will adversely affect the fair value of
an investment. The Plan has no investments subject to
foreign currency risk.
Fair Value Measurement
MCHCP categorizes its fair value measurements with
the fair value hierarchy established by GASB Statement
No. 72, Fair Value Measurements and Application. The
hierarchy for fair value is as follows:
Level 1 - Inputs to the valuation methodology are
unadjusted quoted prices for identical instruments in
active markets available at the measurement date.
Level 2 - Quoted prices for similar instruments
in active markets; quoted prices for identical or
similar instruments in inactive markets; and model
derived valuations in which all significant inputs are
corroborated by observable market data.
Level 3 - Valuations derived from valuation
methodology in which significant inputs are
unobservable.
When available, quoted prices are used to determine
fair value. When quoted prices in active markets are
available, investments are classified with Level 1 of
the fair value hierarchy. MCHCP’s Level 1 investments
primarily consist of investments in U.S. Treasury
obligations for the ISF and U.S. Treasury obligations,
equity securities, and mutual funds for the SRWBT.
When quoted prices in active markets are not available,
fair values are based on evaluated prices received from
MCHCP’s custodian of investments in conjunction
with a third party pricing service and are reported with
Level 2 of the fair value hierarchy. The inputs for Level
2 include, but are not limited to, pricing models such
as benchmarking yields, reported trades, broker-dealer
quotes, issuer spreads and benchmarking securities,
among others. MCHCFs Level 2 investments consist of
investments for both the ISF and SRWBT of U.S Agency
and Mortgage Backed Securities and additionally for
the SRWBT Corporate and Collateralized Mortgage
Obligations. MCHCP did not maintain any Level 3
investments.
Investments
Internal Service Fund
Fair value measurement at report date using
Investments
US Government
Agencies (AGCY)
Mortgage Backed
Securities (MBS)
US Treasury (TRSY)
Fair Value
Quoted prices in
Significant other
Significant
June 30, 2016
active markets for
identical assets
(Level 1)
observable inputs
(Level 2)
unobservable
inputs
(Level 3)
$18,328,147
$
$18,328,147
$ -
2,268,986
-
2,268,986
-
17,261,144
17,261,144
-
-
Total
$37,858,277
$17,261,144
$20,597,133
2016 Annual Report 51
Investments
State Retiree Welfare Benefit Trust
Fair value measurement at report date using
Investments
Fair Value
June 30, 2016
Quoted prices in
active markets for
identical assets
(Level 1)
Significant other
observable inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
US Government
Agencies (AGCY)
$19,475,632
$
$19,475,632
$
Mortgage Backed
Securities (MBS)
16,225,665
-
16,225,665
-
US Treasury (TRSY)
2,108,121
2,108,121
-
-
Corporate (CORP)
10,814,143
-
10,814,143
-
Collateralized
Mortgage Obligations
(CMO)
13,377,839
13,377,839
Equities
17,704,624
17,704,624
-
-
Mutual Funds
22,112,997
22,112,997
-
-
Total
$101,819,021
$41,925,742
$59,893,279
$ -
D. Interfund Activity & Balances
As disclosed above, the ISF provides all administrative
responsibilities related to SRWBT, which has no
separate facilities or staff. Expenses directly attributable
to SRWBT are charged to SRWBT. Other operating
expenses, including personnel, are allocated between
the ISF and the SRWBT based on participant counts for
retired and active participants.
The balance of the inter fund receivable/payable
represents the excess of SRWBT contributions collected
by the ISF Plan over expenses paid by the ISF Plan for
SRWBT.
E. Receivables
Beginning January 1, 2014, the Plan began offering
an Employer Group Waiver Plan (EGWP), a Medicare
Part D prescription dmg plan (PDP) to Medicare
eligible retirees and covered Medicare eligible
dependents. Estimated revenue is recognized as the
SRWBT incurs Medicare eligible retiree prescription
dmg expenditures. In addition, the Plan receives
rebates from its pharmacy benefit manager related to
manufacturers’ rebates and other guaranteed rebates for
non-Medicare Part D prescriptions. For the year ended
June 30, 2016, these rebates are allocated between the
ISF and the SRWBT based upon their respective claims
activity. Estimated revenue is recognized for rebates
based on prescription claims counts, historical average
rebate per claim, and actual receipts.
Other receivables include interest income and member
premium amounts.
52 GUIDE I Financial
F. Furniture, Fixtures & Equipment
Furniture, fixtures and equipment are capitalized at cost when acquired. Depreciation is computed using the straight-
line method over the estimated useful lives of the related assets. Furniture and fixtures are depreciated over a 10-year
useful life. Data processing equipment is depreciated over a five-year useful life. The threshold for the capitalizing of
fixed assets is $1,000.
Maintenance and repairs are charged to expense as incurred. The cost and related accumulated depreciation of assets
sold or retired are removed from the related accounts, and the resulting gains or losses are reflected as non-operating
gains or losses in the statement of revenues, expenses and change in net position. The changes in Furniture, Fixtures
and Equipment for the year ended June 30, 2016 are as presented in the chart below.
Furniture, Fixtures & Equipment
Missouri Consolidated Health Care Plan
Additions
Balance, beginning of year
Additions
Deletions
2016
$2,810,884
38,025
(193,051)
Balance, End of Year
$2,655,858
Accumulated Depreciation
Balance, beginning of year
$2,506,802
Depreciation expense
120,711
Deletions
(193,051)
Balance, End of Year
$2,434,462
G. Plan Funding
State Appropriations/Contributions
Funds are appropriated to the Plan by the Missouri
State General Assembly. Premiums are received
one-half prior to the month of coverage and one-half
during the month of coverage. Funds are received by
the Plan every two weeks and coincide with the State’s
payroll cycle. The State’s monthly per-member active
contribution for fiscal year 2016, averaged $717 per
month. The State’s contribution per member to fund
the current fiscal year cost of retiree plan benefits for
the year ended June 30, 2016 averaged 3.92 5 percent of
active employee covered payroll.
The State did not provide additional funding towards
future OPEB benefits for the period ended June 30,
2016. All state appropriations are available to pay
benefits for both active and retired participants except
for the amounts contributed to fund the OPEB reserve.
2016 Annual Report S3
Member Premiums
Monthly member premiums for State employees are
established annually by the Plan’s Board of Trustees.
These premiums are deducted from employee payroll
checks in advance. Additionally, the Plan bills members
who are not receiving payroll checks two weeks in
advance.
Public Entity Premiums
Monthly public entity premiums are established
annually by the Plan’s Board of Trustees. The Plan bills
the public entities two weeks in advance.
Deferred Premium Revenue
Deferred premium revenue includes premium revenue
from the members, public entities, and the State
received in advance of the month coverage is provided.
Operating/Non-operating Revenues
Operating revenues and expenses reflect items directly
related to providing health benefits to members. Non-
operating revenues and expenses represent investment
income and other items not directly related to
providing health benefits to members.
H. Other Post-Employment Benefits
Employees may participate in state-sponsored medical
coverage in retirement based on Plan criteria. At
June 30, 2016, there were 20,584 retirees and their
dependents who met these eligibility requirements.
For the year ended June 30, 2016, expenditures (net
of retiree contributions) of $129.1 million were
recognized for post-retirement medical insurance
coverage under the self-funded PPO, and less than
$19,000 under the fully insured PPO option.
Fimded Status and Fimding Progress
The funded status of the SRWBT as of the most recent
actuarial valuation is presented below.
Schedule of Funding Progress (in millions)
State Retiree Welfare Benefit Trust
Fiscal Year Ending 2016
Actuarial Value of Assets (a) $ 1 1 7.0
Actuarial Accrued Liability (AAL) (b) $ 1 , 730.7
Unfunded/(Overfunded) AAL (UAAL) (b) - (a) $1,613.7
Funded Ratio (a) / (b) 6.8%
Covered Payroll ( c ) $1,586.5
UAAL as a Percentage of Covered Payroll [(b) - (a) / (c)] 101.7%
54 GUIDE I Financial
Actuarial valuations of an ongoing plan involve
estimates of the value of reported amounts and
assumptions about the probability of occurrence of
events into the future. Examples include assumptions
about future employment, mortality, and the health
care cost trend. Actuarially determined amounts
are subject to continual revision, as actual results
are compared with past expectations and revised
estimates are made about future costs. The estimated
actuarial accrued liability reflected above is based on
the substantive plan in place at the time of the latest
actuarial valuation. The schedule of funding progress,
presented as required supplementary information
following the notes to the financial statements, presents
trend information about whether the actuarial values
of plan assets are increasing or decreasing over time
relative to the actuarial accrued benefits.
The accompanying schedule of employer contributions,
presented as required supplementary information,
presents trend information about the amounts
contributed to the plan by employers in comparison
to the amount that is actuarially determined in
accordance with the requirements of GASB Statement
No. 43. The annual required contribution (ARC)
represents a level of funding that, if paid on an ongoing
basis, is projected to cover normal costs for each year
and amortize any unfunded actuarial liabilities (or
funding excess) over a period not to exceed 30 years.
Projections of benefits for financial reporting
purposes are based on the substantive plan (the plan as
understood by the employer and plan members) and
include the types of benefits provided at the time of
each valuation and the historical pattern of sharing of
benefit costs between the employer and plan members.
The projection of benefits for financial reporting
purposes does not explicitly incorporate the potential
effects of legal or contractual funding limitations on
the pattern of cost-sharing between the employer and
plan members in the future. The actuarial methods
and assumptions used include techniques that are
designed to reduce the effects of short-term volatility in
actuarial accrued liabilities and the actuarial value of
assets, consistent with the long-term perspective of the
calculations.
Projections include a broad array of complex social
and economic events, such as the emergence of new
and expensive medical procedures and prescription
drug options, changes in investment rates of return,
and other uncertainties. As such, the estimate of
post-retirement program costs contains considerable
uncertainty and variability, and actual experience
may vary significantly from the current estimated
obligation. Additional information as of the latest
actuarial valuation is presented on the next page.
2016 Annual Report 55
Summary of Key Actuarial Methods
& Assumptions
State Retiree Welfare Benefit Trust
Valuation Year
July 1, 2015 -June 30, 2016
Actuarial cost method
Amortization method
Asset Valuation method
Actuarial Assumptions
Discount rate
Projected payroll growth rate
Inflation Rate
Health care cost trend rate
Non Medicare is 6.5% for fiscal year 2016; the rate decreases by 0.3% per year to an
ultimate rate of 5% in fiscal year 2021 and later. Medicare is 6.6% for fiscal year 2016;
the rate decreases by 0.4% per year through fiscal year 2019, then by 0.2% per year
until reaching the ultimate rate of 5% in fiscal 2021 and later.
Entry age normal, level percentage of payroll spread
30 years, open, level percent of pay
Market value
6%
4%
3%
Employer Disclosures
Participating employers, upon their implementation
of GASB No. 45, are required to disclose additional
information with regard to funding policy, the
employer’s annual OPEB costs and contributions
made, the funded status and funding progress of the
employer’s individual plan, and actuarial methods and
assumptions used. Employer disclosures for MCHCP
can be found in footnote M.
I. Medical Claims & Capitation
As of June 30, 2016, the Plan insured approximately
92 percent of its members through PPO contracts.
Third-party administrators are paid a contracted
administrative fee per subscriber for the self-insured
contracts, with the Plan bearing all administrative
and medical claims costs of providing coverage to the
members. Enrollment in the High Deductible Health
Plan was approximately 8% for the year ended June 30,
2016.
The liability for estimated accrued claims and
processing costs is based on an actuarial estimate of the
ultimate cost of settling such claims due and payable
as of the balance sheet date (including claims reported
and in process of settlement, claims reported but not
yet processed for settlement, and claims incurred for
services provided but not yet reported or processed for
settlement). The estimated actuarial liability reflects
certain assumptions, which include such factors
as enrollment and utilization. Adjustments to the
estimated actuarial liability for the final settlement of
claims will be reflected in the year that actual results of
the settlement of the claims are made and are known.
56 GUIDE I Financial
As of June 30, 2016, $3,652,622, is included in accrued
medical claims and capitation fee expenses for accrued
PPO capitation expenses. Additionally, $51,502,000 at
June 30, 2016, is included in estimated accrued medical
costs for claims incurred but not yet paid under the
Plan’s self-funded products. Although management
believes these estimates are adequate, the ultimate
liability may he more or less than the amounts
recorded.
The methods for making such estimates and for
establishing the resulting liabilities are continually
reviewed, and any adjustments are reflected in current
operations. Contingent liabilities exist with respect to
claims covered under the Plan in the event a contracted
provider or carrier is unable to meet its obligations to
the Plan. Changes in estimated accrued claims for fiscal
year 2016 are presented below.
Summary of Changes in
Estimated Accrued Claims
Internal Service Fund
2016
Balances
Balance at beginning of year $33,378,000
Current year claims & changes in estimates 269,659,887
Claim Payments (261,642,887)
Balance at End of Year
$41,395,000
Summary of Changes in
Estimated Accrued Claims
State Retiree Welfare Benefit Trust
Balances
2016
Balance at beginning of year
$7,781,000
Current year claims & changes in estimates
129,125,967
Claim Payments
(126,799,967)
Balance at End of Year
$10,107,000
2016 Annual Report 57
J. Retirement Plan
General Information About the
Pension Plan
Plan description. Benefit eligible employees of
MCHCP are provided with pensions through MOSERS
- a cost-sharing multiple-employer defined benefit
pension plan. Chapter 104.320 of the Revised Statutes
of Missouri grants the authority to establish a defined
plan for eligible state and other related agency
employees. MOSERS issues an annual Comprehensive
Annual Financial Report (CAFR), a publicly available
report that can be obtained at www.mosers.org.
Benefits provided. MOSERS provides retirement,
disability, and life insurance benefits to eligible
employees. The base retirement benefits are calculated
by multiplying the employee’s final average pay by
a factor multiplied by the years of credited service.
The factor is based on the specific plan in which the
employee participates, which is based on the employee’s
hire date. Information on the three plans administered
by MOSERS (MSEP, MSEP 2000, and MSEP 2011
retirement plans) and how eligibility and the benefit
amount is determined for each plan may be found
in the Notes to the Financial Statements of MOSERS’
CAFR.
Contributions. Per Chapter 104.436 of the Revised
Statutes of Missouri, contribution requirements of the
active employees and the participating employers are
established and may be amended by the MOSERS Board
of Trustees. Employees in the MSEP 2011 Plan are
required to contribute 4.0 percent of their annual pay.
MCHCFs required contribution rate for the year ended
June 30, 2016, was 16.97 percent of annual payroll,
actuarially determined as an amount that, when
combined with employee contributions, is expected to
finance the cost of benefits earned by employees during
the year, with an additional amount to finance any
unfunded accrued liability. The contribution rate for
the MOSERS plan year ended June 30, 201 5 was 16.97
percent, which is the year of measurement for the net
pension liability. Contributions to the pension plan
from MCHCP were $514,420 for the year ended June
30,2016.
For purposes of measuring the net pension liability,
deferred outflows of resources and deferred inflows
of resources related to pensions, and pension expense,
information about the fiduciary net position of
MOSERS and additions/deductions from MOSERS’
fiduciary net position have been determined on the
same basis as they are reported by MOSERS. For this
purpose, benefit payments (including refunds of
employee contributions) are recognized when due
and payable in accordance with the benefit terms.
Investments are reported at fair value.
Pension Liabilities, Pension Expense, and
Deferred Outflows of Resources and Deferred
Inflows of Resources Related to Pensions
At June 30, 2016, MCHCP reported a liability of
$5,133,995 for its proportionate share of the net
pension liability. The net pension liability was
measured as of June 30, 2015, and the total pension
liability used to calculate the net pension liability was
determined by an actuarial valuation as of that date.
The MCHCP proportion of the net pension liability was
based on MCHCFs actual share of contributions to the
pension plan relative to the actual contributions of all
participating employers for MOSERS plan year ended
June 30, 201 5. At June 30, 201 5, MCHCP’s proportion
was 0.160 percent, an increase from its proportion
measured using 0.1 577 percent as of the June 30, 2014,
measurement date. There were no changes in benefit
terms during the MOSERS plan year ended June 30,
201 5, that affected the measurement of total pension
liability.
For the year ended June 30, 2016, MCHCP recognized
pension expense of $519,586. At June 30, 2016, MCHCP
reported deferred outflows of resources and deferred
inflows of resources related to pensions from the
sources on the following page.
58 GUIDE I Financial
Deferred Outflows/Inflows of
Resources Related to Pensions
Deferred Outflows
Deferred Inflows
of Resources
of Resources
Differences between expected and actual experience
$9,590
$33,214
Changes of assumptions
-
68,329
Net difference between projected and actual earnings
on pension plan investments
394,204
.
Changes in proportion and differences between MCHCP
contributions and proportionate share of contributions
48,934
-
MCHCP contributions subsequent to the measurement
date of 6-30T5
514,420
.
Total
$967,148
$101,543
Contributions of $514,420 reported as deferred
outflows of resources related to pensions resulting from
MCHCP contributions subsequent to the measurement
date will be recognized as a reduction of the net
pension liability in the year ended June 30, 2017. Other
amounts reported as deferred outflows of resources and
deferred inflows of resources related to pensions will be
recognized in pension expense in MCHCFs fiscal year
following MOSERS’ fiscal year as follows:
Projected Recognition of
Deferred Outflows/ (Inflows)
Plan Year ending June 30:
2016
2017
2018
2019
2020
Thereafter
$16,689
16,083
13,764
304,651
2016 Annual Report 59
Assumptions. The total pension liability in the June 30, 201 5 actuarial valuation, which is also the date of
measurement for GASB 68 purposes, was determined using the following actuarial assumptions, applied to all periods
included in the measurement;
Price inflation
2.5 percent, approximate
Salary increases or wage inflation
0% for FY 2016 and 3.0 percent annually, average,
including inflation thereafter
Investment rate of return
8.0 percent per year, compounded annually, net
after investment expenses and including inflation
Mortality rates were based on the RP-2000 combined
healthy mortality table projected to 2016 with Scale
AA. The pre-retirement mortality rates used were
100% of the port-retirement mortality rates for
males and 80% of the port-retirement mortality for
females, as appropriate, with adjustments for mortality
improvements based on Scale AA.
The change in assumptions recorded as deferred
inflows of resources was related to a change in wage
assumptions. For the June 30, 201 5, valuation, wage
inflation is assumed to be 0% in the first year and 3%
thereafter. This is a one-time change based on the pay
freeze enacted for fiscal year ending June 30, 2016.
Previously, salary increases were assumed to be 3.0% to
5.9% annually on average, including inflation.
The actuarial assumptions used in the June 30, 201 5
valuation were based on the results of an actuarial
experience study for the period July 1, 2007 to June
30, 2011. As a result of the 2011 actuarial experience
study, the MOSERS Board made various demographic
assumption changes to more closely reflect actual
experience. The most significant change was lowering
the assumed annual investment rate of return from
8. 5 percent to 8 percent. MOSERS is conducting an
experience study and the results of that study are
expected to be finalized prior to June 30, 2016 which
will be used by the actuarial firm to conduct the
valuation report for MOSERS’ FY 2016’s valuation
which impacts MCHCP’s FY 2018 payroll.
The long term expected rate of return on pension plan
investments was determined using a building block
method in which best estimates rates of expected future
real rates of return (expected returns, net of pension
plan investment expense and inflation) are developed
for each major asset class. These ranges are combined
to produce the long term expected rate of return by
weighting the expected future real rates of return by
the target asset allocation percentage and by adding
expected inflation. Best estimates of geometric real
rates of return for each major asset class included in
MOSERS target asset allocation as of June 30, 2015 are
summarized in the table on the following page.
60 GUIDE I Financial
Asset Class Allocation
Weighted Average
Asset
Policy
Long-term Expected
Long-Term Expected
Class
Allocation
Real Rate of Return*
Real Rate of Return
Beta Balanced
80.0%
5.7%
4.6%
Illiquids**
20.0%
7.3%
1.5%
1
*Represent best estimates of geometric rates of return for each major asset class included
** Illiquid portfolio upper limit of 27.5% of capital, no new commitments past 23%
Discount rate. The discount rate used to measure the
total pension liability was 8.0 percent. The projection of
cash flows used to determine the discount rate assumed
that employee contributions will be made at the
current contribution rate and that contributions from
employers will be made at required rates, actuarially
determined. Based on those assumptions, the pension
plan’s fiduciary net position was projected to be
available to make all projected future benefit payments
of current active and inactive employees. Therefore,
the long-term expected rate of return on pension plan
investments was applied to all periods of projected
benefit payments to determine the total pension
liability.
Sensitivity of the proportionate share of the net
pension liability to changes in the discount rate. The
following presents MCHCP’s proportionate share of the
net pension liability calculated using the discount rate
of 8.0 percent, as well as what MCHCP’s proportionate
share of the net pension liability would be if it were
calculated using a discount rate that is 1 percentage
point lower (7.0 percent) or 1 percentage point higher
(9.0 percent) than the current rate;
Sensitivity of the Net Pension Liability
to Changes in the Discount Rate
1% Decrease Current Discount Rate 1% Increase
(7.0%) (8.0%) (9.0%)
MCHCP’s proportionate share of the
net pension liability $7,240,366 $5,137,542 $3,371,493
2016 Annual Report 61
Pension plan fiduciary net position. Detailed
information about the pension plan’s fiduciary net
position is available in the separately issued MOSERS
financial report.
Additionally, the Plan did not report any payables to
MOSERS at June 30, 2016.
K. Deferred Compensation Plan
The State of Missouri Deferred Compensation Plan
is a voluntary defined contribution plan offered in
compliance with IRS Code Sections 457 and 401(a).
The Plan is administered by MOSERS in accordance
with Sections 105.900 to 105.927 of the Revised
Statutes of Missouri. MOSERS has retained ICMA-RC
for participant account record keeping and processing
services since November 2011. The Plan offers all state
employees the opportunity to save for retirement with
before and after tax (Roth) money. New permanent
fulTtime and part-time employees are automatically
enrolled in the plan at a 1% contribution per pay period
made via payroll deduction.
Audited financial statements for the State of Missouri
Deferred Compensation Plan can be viewed on
MOSERS website at www.mosers.org.
Schedule of Percentage of
OPEB Cost Contributed
Missouri Consolidated Health Care Plan
Fiscal Year Ending 2016
Annual OPEB Cost
Percentage of OPEB Cost Contributed
Net OPEB Obligation
L. Employee Assistance Program
An employee assistance benefit program is offered to
all State employees and their immediate families. The
program, serviced through ComPsych, offers six free
mental health counseling sessions per problem, per
year and can be accessed 24 hours a day through a toll-
free number.
M. Post-Employment Retiree Health Care
For the year ended June 30, 2008, MCHCP adopted
GASB Statement No. 45, Accounting and Financial
Reporting for Postemployment Benefits Other than Pensions.
However, all State agencies and component units are
included in the State’s post-employment retiree health
care calculations.
Thus, separate information is not available for MCHCP,
which is a component unit of the State. For fiscal year
2016, MCHCP contributed $119,495 for its employees
in accordance with the State’s funding policy toward
the annual required contribution (ARC) for post-
employment retiree health care. These financial
statements include the OPEB Plan in which MCHCP
participates. See note H for further information
regarding the OPEB plan.
$101,903,509
65.0%
$357,046,404
62 GUIDE I Einancial
Katy Trail
Rocheport, MO
i
1
%
\
I
/
/
I
\
Direction
Required Supplementary Information
Katy Trail
Rhineland, MO
L. ^
ir
iM'
■■
Schedule of Claims Development
State Actives & Retirees
2016
2016
2016
Total
Active
Retiree
Fiscal Year
July 1, 2015-
June 30, 2016
July 1, 2015-
June 30, 2016
July 1, 2015-
June 30, 2016
Required contribution &
investment income
$572,965,632
$423,347,086
$149,618,546
Administrative and
third-party expenses
28,514,421
20,428,449
8,085,972
Estimated Incurred Claims &
Expenses End of Policy Year
$544,451,211
$402,918,637
$141,532,574
Paid Claims Summary
Paid (cumulative) as of
July 1, 2015-
June 30, 2016
July 1, 2015-
June 30, 2016
July 1, 2015-
June 30, 2016
End of Policy Year
$445,260,000
$339,688,000
$105,572,000
One year later
-
-
-
Two years later
-
-
-
Incurred Claims Summary
Re-estimated incurred claims
& expenses
July 1, 2015-
June 30, 2016
July 1, 2015-
June 30, 2016
July 1, 2015-
June 30, 2016
End of policy year
$489,459,000
$374,924,000
$114,535,000
One year later
-
-
-
Two years later
-
-
-
Increase (Decrease) in Estimated
Incurred Claims & Expenses from
End of Policy Year
$54,992,211
$27,994,637
$26,997,574
66 DIRECTION | Required Supplementary Information
2015
2015
2015
2014
2013
Total
Active
Retiree
Total
Total
July 1, 2014-
June 30, 2015
July 1, 2014-
June 30, 2015
July 1, 2014-
June 30, 2015
July 1, 2013-
June 30, 2014
July 1, 2012-
June 30, 2013
$546,588,384
$414,790,352
$131,798,032
$536,537,855
$530,983,836
31,253,188
22,755,674
8,497,514
28,895,131
24,524,427
$515,335,196
$392,034,678
$123,300,518
$507,642,724
$506,459,409
July 1, 2014-
June 30, 2015
July 1, 2014-
June30, 2015
July 1, 2014-
June 30, 2015
July 1, 2013-
June 30, 2014
July 1, 2012-
June 30, 2013
$515,335,196
$392,034,678
$123,300,518
$507,642,724
$506,459,409
464,959,000
353,635,000
111,324,000
444,302,000
424,574,000
-
-
-
444,563,000
424,603,000
July 1, 2014-
June 30, 2015
July 1, 2014-
June30, 2015
July 1, 2014-
June 30, 2015
July 1, 2013-
June 30, 2014
July 1, 2012-
June 30, 2013
$464,270,000
$353,611,000
$110,659,000
$440,361,000
$422,902,000
465,392,000
353,848,000
111,544,000
444,456,000
424,673,000
-
-
-
444,563,000
424,603,000
$51,065,196
$38,423,678
$12,641,518
$67,281,724
$83,557,409
2016 Annual Report 67
Summary of Key Actuarial Methods and Assumptions
State Retiree Welfare Benefit Trust
Fiscal Year
Valuation Year
Actuarial cost method
Amortization method
Asset valuation method
Actuarial
Assumptions
Discount rate
Projected payroll
growth rate
Health care cost trend
rate (Medical &
prescription drugs
combined)
2016
July 1, 2015-
June 30, 2016
Entry age normal,
level percent of pay
30 years, open,
level percent of pay
Market Value
6.0%
4.0%
Non Medicare is 6.5%
for fiscal year 2016;
the rate decreases by
0.3% per year to an
ultimate rate of 5% in
fiscal year 2021 and
later. Medicare is 6.6%
for fiscal year 2016;
the rate decreases by
0.4% per year through
fiscal year 2019, then
by 0.2% per year until
reaching the ultimate
rate of 5% in fiscal
2021 and later.
2015
July 1, 2014-
June 30, 2015
Entry age normal,
level percent of pay
30 years, open,
level percent of pay
Market Value
6.0%
4.0%
Non-Medicare is 6.8%
for Fiscal 2015; the rate
decreases by 0.3% per
year to an ultimate rate
of 5.0% in Fiscal 2021
& later.
Medicare is 7.0% for
Fiscal 2015; the rate
decreases by 0.4%
per year through Fiscal
2019, then by 0.2% per
year until reaching the
ultimate rate of 5.0% in
Fiscal 2021 & later.
2014
July 1, 2013-
June 30, 2014
Entry age normal,
level percent of pay
30 years, open,
level percent of pay
Market Value
6.0%
4.0%
Non-Medicare is 7.1%
for Fiscal 2014; the rate
decreases by 0.3% per
year to an ultimate rate
of 5.0% in Fiscal 2021
& later.
Medicare is 7.4% for
Fiscal 2014; the rate
decreases by 0.4%
per year through Fiscal
2019, then by 0.2% per
year until reaching the
ultimate rate of 5.0% in
Fiscal 2021 & later.
68 DIRECTION | Required Supplementary Information
2013
2012
2011
2010
July 1, 2012-
June 30, 2013
July 1, 2011-
June 30, 2012
July 1, 2010-
June 30, 2011
July 1, 2009-
June 30, 2010
Entry age normal,
level percent of pay
Entry age normal,
level percent of pay
Entry age normal,
level percent of pay
Entry age normal,
level percent of pay
30 years, open,
level percent of pay
30 years, open,
level percent of pay
30 years, open,
level percent of pay
30 years, open,
level percent of pay
Market Value
Market Value
Market Value
Market Value
6.5%
6.5%
7.0%
7.0%
4.0%
4.0%
4.0%
4.0%
Non-Medicare is 7.4%
for Fiscal 2013; the rate
decreases by 0.3% per
year to an ultimate rate
of 5.0% in Fiscal 2021
& later.
Non-Medicare: 8.00%
in fiscal 2012, then
decreasing by 3/5%
per year to an ultimate
of 5.0% in fiscal 201 7
& after.
7.67% in fiscal year
201 1, then decreasing
by 2/3% per year to an
ultimate of 5.0% in fiscal
2015 & after.
8.33% in fiscal year
2010, then decreasing
by 2/3% per year to an
ultimate of 5.0% in fscal
2015 & after.
Medicare is 7.8% for
Fiscal 2013; the rate
decreases by 0.4%
per year through Fiscal
2019, then by 0.2% per
year until reaching the
ultimate rate of 5.0% in
Fiscal 2021 & later.
Medicare: 8.50%
in fiscal 2012, then
decreasing by 7/10%
per year to an ultimate
of 5.0% in fiscal 201 7
& after.
2016 Annua} Report 69
Schedule of Funding Progress (in millions)
State Retiree Welfare Benefit Trust
Fiscal Year Ending
2016
2015
2014
2013
Actuarial Value of Assets (a)
$117.0
$106.9
$102.3
$89.5
Actuarial Accrued Liability (AAL) (b)
$1,730.7
$1,813.5
$1,649.5
$1,485.6
Unfunded/(Overfunded)
AAL (UAAL) (b) - (a)
$1,613.7
$1,706.6
$1,547.2
$1,396.1
Funded Ratio (a) / (b)
6.8%
5.9%
6.2%
6.0%
Covered Payroll ( c )
$1,586.5
$1,583.7
$1,566.7
$1,552.7
UAAL as a Percentage of
Covered Payroll [(b) - (a) / (c)]
101.7%
107.8%
98.8%
89.9%
Schedule of Employer Contributions
State Retiree Welfare Benefit Trust
Fiscal Year Ending
Annual Required
Contributions
Actual
Contributions
Percentage
Contributed
June 30, 2016
$96,551,977
$66,199,740
68.6%
June 30, 2015
103,674,590
62,585,666
60.4%
June 30, 2014
100,143,855
56,314,655
56.2%
June 30, 2013
93,385,621
54,005,719
57.8%
June 30, 2012
100,799,906
57,080,104
56.6%
June 30, 2011
99,766,158
53,353,553
53.5%
June 30, 2010
93,864,650
74,384,744
79.2%
June 30, 2009
124,51 1,154
91,446,684
73.4%
June 30, 2008
104,479,000
68,628,500
65.7%
The State provided benefit payments and administrative costs of $62. 6M in fiscal year 2015. The
Statement of Changes in Fiduciary Net Position provides more details concerning these amounts.
70 DIRECTION | Required Supplementary Information
2012
2011
2010
2009
2008
$83.6
$117.0
$106.9
$102.3
$89.5
$1,594.5
$1,730.7
$1,813.5
$1,649.5
$1,485.6
$1,510.9
$1,613.7
$1,706.6
$1,547.2
$1,396.1
5.2%
6.8%
5.9%
6.2%
6.0%
$1,534.2
$1,586.5
$1,583.7
$1,566.7
$1,552.7
98.5%
101.7%
107.8%
98.8%
89.9%
Schedule of the Proportionate Share of
the Net Pension Liability
Missouri Consolidated Health Care Plan
MCHCP’s Proportion Of The Net Pension Liability (Asset)
MCHCP’s Proportionate Share Of The Net Pension
Liability (Asset)
MCHCP’s Covered-Employee Payroll
MCHCP’s Proportionate Share Of The Net Pension Liability
(Asset) As A Percentage Of Its Covered-Employee Payroll
Plan Eiduciary Net Position as a Percentage of the Total
Pension Liability
June 30, 2016
June 30, 2015
0.1600%
0.1577%
$5,133,995
$3,718,668
$3,095,028
$3,144,017
165.88%
1 1 8.28%
72.62%
79.49%
*Based on a measurement date and actuarial valuation as of the end of the preceding fiscal year.
NOTE: This schedule will ultimately contain 10 years of data.
2016 Annual Report 71
Schedule of Contributions
Missouri Consolidated Health Care Plan
June 30, 2016
June 30, 2015
Required contribution $525,227
Contributions in relation to the required contribution $525,227
Contribution deficiency (excess) $0
MCHCP’s covered-employee payroll $3,095,028
Contributions as a percentage of covered-employee payroll 1 6.93%
$514,746
$514,746
$0
$3,144,017
16.37%
*Based on a measurement date and actuarial valuation as of the end of the preceding fiscal year.
NOTE: This schedule will ultimately contain 10 years of data.
Notes to Required Supplementary
Information for the Year Ended
June 30/ 2016
Changes of benefit terms or assumptions
Changes of benefit terms. There were no changes to benefit terms in the plan for the year ended June 30, 2015.
Changes of assumptions. There were no changes to assumptions in valuation reports for the year ended June 30,
2015, other than the assumption that there would be no pay increases for fiscal year ending June 30, 2016, only.
72 DIRECTION | Required Supplementary Information
Route 66 State Park
Eureka, MO
Statistical
Historical Data: Revenues by Source
Internal Service Fund, ten years ended June 30, 2016
Fiscal
State/Employer
Member
Public Entity
Pharmacy Rebates
Total Operating
Investment &
Year
Contributions
Contributions
Income
& Subsidy
Revenues
Other Income
2016
324,857,578
83,815,598
7,904,470
13,500,867
430,078,513
1,173,043
2015
324,630,770
83,734,256
8,063,991
5,689,731
422,1 18,748
735,595
2014
314,696,927
87,402,560
8,234,207
7,684,071
418,017,765
877,940
2013
316,307,501
90,793,617
8,215,776
4,256,453
419,573,347
436,909
2012
319,804,444
89,797,753
8,492,621
5,375,360
423,470,178
853,463
2011
354,247,003
83,925,846
9,513,436
4,522,990
452,209,275
708,812
2010
356,953,666
73,309,792
10,295,456
5,344,809
445,903,723
1,104,898
2009
270,289,644
65,348,201
9,966,190
4,603,754
350,207,789
2,504,570
2008
276,886,166
57,339,368
10,008,570
5,033,832
349,267,936
7,099,139
2007
362,001,092
93,152,562
9,121,094
10,150,614
474,425,362
9,104,038
Historical Data: Expenses by Type
Internal Service Fund, ten years ended June 30, 2016
Medical Claims/Capitation
Fiscal
& Health Administrative
Total
Year
Services
Administration & Payroll
Other
Operating Expenses & Fees
2016
452,409,305
3,846,601
1,644,070
457,899,976
2015
420,740,454
3,998,457
1,846,818
426,585,729
2014
399,793,666
3,966,917
1,961,783
405,722,366
2013
384,588,353
3,983,962
1,805,563
390,377,878
2012
381,291,864
3,885,557
2,097,573
387,274,994
2011
422,066,045
4,148,726
2,134,781
428,349,552
2010
422,1 17,593
4,275,900
2,230,997
428,624,490
2009
431,216,276
4,809,936
2,117,078
438,143,290
2008
376,273,599
4,451,041
1,823,192
382,547,832
2007
437,756,208
5,597,367
1,975,742
445,329,317
76 STEADFAST | Statistical Information
Distribution of Claim Payments
State Membership, Fiscal Year 2016
Outpatient
Professional
Inpatient
Professional
Outpatient
Facility
Prescription
Drugs
Inpatient
Facility
2016 Annual Report 77
Healthcare Options by Year & Total Lives
State Membership, ten years ended June 30, 2016
2016
2015
2014
2013
2012
201 1
2010
2009
2008
2007
0 20
40 60 80 100
Insured HMO/POS Self-Insured PPO
Self -Insured HMO/Copay Insured PPO
0 HDHP
78 STEADFAST | Statistical Information
Statement of Revenues, Expenses
& Changes in Net Position
Internal Service Fund, ten years ended June 30, 2016
Fiscal Year Ending
2016
2015
2014
2013
Operating Revenues
State/employer contributions
$324,857,578
$324,630,770
$314,696,927
$316,307,501
Member contributions
83,815,598
83,734,256
87,402,560
90,793,617
Public entity contributions
7,904,470
8,063,991
8,234,207
8,215,776
Pharmacy rebates
13,500,867
5,689,731
7,684,071
4,256,453
Total
Operating Revenues
$430,078,513
$422,118,748
$418,017,765
$419,573,347
Operating Expenses
Medical claims &
capitation expense
$437,471,527
$403,830,055
$384,618,997
$372,475,046
Claims administration services
13,218,054
15,639,455
13,852,877
10,806,319
Payroll and related benefits
3,192,904
3,171,205
3,256,596
2,956,116
Health management
1,719,724
1,270,944
1,321,792
1,306,988
Administration
653,697
827,252
710,321
893,425
Professional services
962,817
1,132,123
1,239,582
1,219,526
Employee Assistance Program
594,341
598,961
578,534
586,037
Depreciation
86,912
115,734
143,667
134,421
Total
Operating Expenses
$457,899,976
$426,585,729
$405,722,366
$390,377,878
Operating revenues over (under)
operating expenses
(27,821,463)
(4,466,981)
12,295,399
29,195,469
Nonoperating Revenues
Investment and other income
1,173,043
$735,595
$877,940
$436,909
Net Position
Change in net position
($26,648,420)
($3,731,386)
$13,173,339
$29,632,378
Net position, beginning of
year, adjusted
135,431,366
139,162,752
130,428,285
100,795,907
Net Position,
End of Year
$108,782,946
$135,431,366
$143,601,624
$130,428,285
80 STEADFAST | Statistical Information
2012
2011
2010
2009
2008
2007
$319,804,444
$354,247,003
$356,953,666
$270,289,644
$276,886,166
$362,001,092
89,797,753
83,925,846
73,309,792
65,348,201
57,339,368
93,152,562
8,492,621
9,513,436
10,295,456
9,966,190
10,008,570
9,121,094
5,375,360
4,522,990
5,344,809
4,603,754
5,033,832
10,150,614
$423,470,178
$452,209,275
$445,903,723
$350,207,789
$349,267,936
$474,425,362
$369,224,125
$409,567,239
$405,742,184
$411,593,266
$357,621,982
$414,402,466
10,715,326
11,127,397
13,711,789
15,104,342
14,432,722
17,604,641
2,995,419
3,118,821
3,365,166
3,605,582
3,291,979
4,123,871
1,352,413
1,371,409
2,663,620
4,518,668
4,218,895
5,749,101
755,431
668,081
910,734
1,204,354
1,159,062
1,473,496
1,410,821
1,359,829
1,132,392
1,137,039
907,127
816,500
686,752
774,952
757,934
696,380
674,601
881,723
134,707
361,824
340,671
283,659
241,464
277,519
$387,274,994
$428,349,552
$428,624,490
$438,143,290
$382,547,832
$445,329,317
36,195,184
23,859,723
17,279,233
(87,935,501)
(33,279,896)
29,096,045
$853,463
$708,812
$1,104,898
$2,504,570
$7,099,139
$9,104,038
$37,048,647
$24,568,535
$18,384,131
($85,430,931)
($26,180,757)
$38,200,083
63,747,260
39,178,725
20,794,594
106,225,525
132,406,282
94,206,199
$100,795,907
$63,747,260
$39,178,725
$20,794,594
$106,225,525
$132,406,282
2016 Annual Report 81
Schedule of Net Position by Component
Internal Service Fund, ten years ended June 30, 2016
Net
Position
Net investments in
capital assets
Unrestricted
Total net position
2016
$221,396
$108,561,550
$108,782,946
2015
304,082
135,127,283
135,431,365
2014
250,090
143,351,534
143,601,624
2013
262,720
130,165,565
130,428,285
2012
256,281
100,539,626
100,795,907
2011
333,028
63,414,232
63,747,260
2010
418,325
38,760,400
39,178,725
2009
488,735
20,305,859
20,794,594
2008
447,943
105,777,582
106,225,525
2007
400,575
132,005,707
132,406,282
Full-Time Employees
Missouri Consolidated Health Care Plan, ten years ended June 30, 2016
Department
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
Executive &
Administration
2.00
2.00
2.00
2.00
5.00
4.76
4.46
3.61
3.85
4.00
Operations
48.54
50.00
50.97
48.10
46.59
47.79
52.80
58.98
57.07
58.06
General Counsel
1.20
2.00
2.50
1.50
2.00
1.75
0.75
1.00
1.00
1.00
Internal Audit
3.00
3.00
4.00
4.00
3.00
3.00
2.96
3.00
3.00
2.88
Human Resources
1.00
1.00
1.00
0.53
1.00
0.82
1.48
2.00
2.00
1.62
Fiscal
6.00
6.00
6.00
6.00
6.00
6.00
6.00
6.00
6.00
5.60
Totals
61.74
64.00
66.47
62.13
63.59
64.12
68.45
74.59
72.92
73.16
Source: Missouri Consolidated Health Care Budget Documents
82 STEADFAST | Statistical Information
Paid Claims Distribution by Individual
State Members Fiscal Year 2016
$120M
$100M
$80M
$60M
$40M
$20M
$0-5K $5-10K $10-15K $15-20K $20-30K $30-50K $50-75K $75-100K
Net Payment
Percent of Membership
78.9% of membership accumulated $0-$5K in claims and accounted for $81.3M in cost
0.6%
over
$100K
2016 Annual Report 83
State Membership Enrolled in MCHCP
Subscribers & Dependents as of June 30, 2016
Active Retiree COBRA Disabled Survivors Vested
Age
Female
Male
Female
Male
Female Male
Female
Male
Female
Male
Female
Male
Total
<1
408
377
3
3
0
1
0
0
0
0
1
0
793
1-10
4,810
4,993
20
15
2
2
1
1
3
4
6
3
9,860
11-19
5,803
6,180
118
104
0
3
4
5
8
5
1 1
5
12,246
20-24
3,637
3,401
203
183
1
2
7
1
11
9
7
2
7,464
25-29
2,713
2,050
46
51
3
5
2
0
0
7
0
1
4,878
30-34
2,701
1,835
6
8
3
1
1
0
0
1
1
1
4,558
35-39
3,100
1,885
1
5
1
1
5
0
0
1
2
0
5,001
40-44
3,365
2,049
6
6
1
0
5
4
0
0
9
4
5,449
45-49
3,921
2,394
27
13
4
1
12
5
3
0
12
8
6,400
50-54
4,314
2,71 1
322
139
2
1
21
15
3
4
18
6
7,556
55-59
3,720
2,547
1,267
572
3
1
21
7
19
7
18
11
8,193
60-64
2,383
1,903
2,471
1,341
8
3
7
4
43
12
5
5
8,185
65-69
612
670
2,843
1,789
0
0
2
1
82
27
1
1
6,028
70-74
89
136
1,878
1,324
0
0
1
1
89
26
0
0
3,544
75-79
17
23
1,394
891
0
0
0
0
118
41
1
0
2,485
+
o
00
5
9
1,610
875
0
0
0
0
329
57
1
1
2,887
Total
41,598
33,163
12,215
7,319
28
21
89
44
708
201
93
48
95,527
Total
Active
74,761
Total
Retirees
19,534
Total
COBRA
49
Total
Disabled
133
Total
Survivors
909
Total
Vested
141
84 STEADFAST | Statistical Information
Enrollment History
State Membership, ten years ended June 30, 2016
Year
Active
Retiree
COBRA
Disabled
Survivors
Vested
Total
2007
84,585
16,154
189
424
820
267
102,439
2008
85,884
16,538
135
390
821
254
1 04,022
2009
88,277
16,802
189
351
852
210
106,681
2010
86,744
1 7, 1 22
260
271
857
171
105,425
2011
79,317
1 7,682
147
258
872
165
98,441
2012
77,069
1 7,937
65
221
867
169
96,328
2013
76,288
18,361
1 1 1
205
847
171
95,983
2014
76,713
18,630
65
167
855
159
96,589
2015
75,808
19,100
59
136
893
142
96,138
2016
74,761
19,534
49
133
909
141
95,527
Enrollment Distribution
State Membership, ten years ended June 30, 2016
120,000
100,000
80,000
60,000
40.000
20.000
0 Active/COBRA
Retiree/Disabled/Survivor/Vested
2016 Annual Report 85
Public Entity Membership Enrolled in MCHCP
Subscribers & Dependents as of June 30, 2016
Active
Retiree
COBRA
Age
Female
Male
Female
Male
Female
Male
Total
<1
2
2
0
0
0
0
4
1-10
29
20
0
0
1
1
51
11-19
31
41
0
0
0
1
73
20-24
33
43
0
0
0
0
76
25-29
50
36
0
0
0
0
86
30-34
40
39
0
0
0
1
80
35-39
34
41
0
0
0
0
75
40-44
48
39
0
0
0
0
87
45-49
58
40
0
0
0
0
98
50-54
86
48
0
0
0
0
134
55-59
76
50
1
0
2
1
130
60-64
80
48
3
2
1
0
134
65-69
17
15
3
0
0
0
35
70-74
2
6
0
0
0
0
8
75-79
1
0
2
2
0
0
5
+
o
00
0
1
1
0
0
0
2
Total
587
469
10
4
4
4
1,078
Total Active
Total Retirees
Total COBRA
1,056
14
8
86 STEADFAST | Statistical Information
Enrollment History
Public Entity Membership, ten years ended June 30, 2016
Year
Active
Retiree
COBRA
Total
2007
1,851
1 1
18
2008
1,752
18
13
mm
2009
1,590
7
16
■BB
2010
1,596
14
16
1,626
2011
1,365
13
12
1,390
2012
1,277
10
9
1,296
2013
1,244
9
9
1,262
2014
1,197
14
2
1,213
2015
1,115
12
4
1,131
2016
1,056
14
8
1,078
Enrollment Distribution
Public Entity Membership, ten years ended June 30, 2016
2000
1800
1600
1400
1200
1000
800
600
400
200
2007 2008 2009 2010 2011 2012 2013 2014 2015
Active/COBRA Retiree/Disabled/Survivor/Vested
2016
2016 Annual Report 87
Plan Demographics
State Membership, Fiscal Year 2016
Total Lives
95,527
40
years
irt
43% 57%
88 STEADFAST | Statistical Information
Plan Demographics
Public Entity Membership, Fiscal Year 2016
Total Lives
1,078
42
years
irt
44% 56%
2016 Annual Report 89
Photo Citations
Page 2
“BigOakl” courtesy of Missouri State Parks. Accessed
November 21, 2016. https;//www.flickr.com/photos/
mostateparks
Page 9
“VanMeterl” courtesy of Missouri State Parks.
Accessed December 5, 2016. https;//www.flickr.com/
photos/mostateparks
Page 14
“Grand Bluffs Conservation Center, Hermann”
courtesy of Missouri Division of Tourism. Accessed
November 21, 2016. https;//www.flickr.com/photos/
missouridivisionoftourism
Page 21
“Trail Signal on the Katy Trail, Clifton City” courtesy
of Missouri State Parks. Accessed November 21, 2016.
littps://www.flickr.com/photos/mostateparks
Page 22
“White Oak Trace Trail, Cape Girardeau” courtesy
of Missouri Division of Tourism. Accessed
November 29, 2016. https;//www.flickr.com/photos/
missouridivisionoftourism
Page 34
“River Bluffs, Hermann” courtesy of Missouri Division
of Tourism. Accessed November 21, 2016. https;//
www.flickr.com/photos/missouridivisionoftourism
Page 37
“Katy Trail Color Tram Tours 2012” courtesy of
the State of Missouri. Accessed November 21, 2016.
littps://www.flickr.com/photos/mogov
Page 41
“White Oak Trace Trail, Cape Girardeau” courtesy
of Missouri Division of Tourism. Accessed
November 21, 2016. https://www.flickr.com/photos/
missouridivisionoftourism
Page 62
“Les Bourgeois Vineyards, Rocheport” courtesy
of Missouri Division of Tourism. Accessed
November 21, 2016. https://www.flickr.com/photos/
missouridivisionoftourism
Page 64
“Grand Bluffs Conservation Center, Hermann”
courtesy of Missouri Division of Tourism. Accessed
November 21, 2016. https://www.flickr.com/photos/
missouridivisionoftourism
Page 73
“Route661” courtesy of Missouri State Parks. Accessed
November 21, 2016. https://www.flickr.com/photos/
mostateparks
Page 74
“Pickle Creek NA, Hawn State Park” courtesy
of Missouri Division of Tourism. Accessed
November 21, 2016. https://www.flickr.com/photos/
missouridivisionoftourism
Page 79
“Katy Trail State Park Near McBaine” courtesy
of Missouri Division of Tourism. Accessed
November 21, 2016. https://www.flickr.com/photos/
missouridivisionoftourism
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